Atul_Tirole

STATE BANK OF INDIA Long Term Analysis

Long
NSE:SBIN   STATE BK OF INDIA
Since Starting of year 2009, SBIN trading in broader range of 350-150. In this zone it has created 3 Major Levels
1) Support Level
2) Middle Level
3) Resistance Level

1) Support Level: Journey started from July 2009 when SBIN took support at its previous Swing High of 150 Zone. After that it became such an important level where it works as Support for another 5 more times and still maintaining its significance.

2) Middle Level: This is a very crucial level which acted as many times as support and resistance . At this level Price has taken 4 times support, faced 5 times resistance and 3 upside breakout rally. On chart Green Arrow as Support, Red Arrow as Resistance and Yellow arrow as breakout rally. This is the level which divides the complete Trading Range (150-350) into Two Zones.

(I) Zone A: This zone was created between the ranges of 150-230. We can also say it as Accumulation Zone where Smart Money Enters. We Highlighted the various areas on chart named A, B, C, D and E.

A, B, D, E is the areas where volumes are so high and almost every candle’s volume crosses the Average Volume . In these areas Average Volume Line also rises sharply.

In this Zone there is an area C where Volume did not rise but from support zone price took very sharp upside rally.
If you see area A and D where volume was high near the support zone and Price Range & time was less. Due to less time Smart Money entered with heavy volume that’s why A and D has high volume .

Area B also an area where heavy volume seen but look at price range which is covered by B in accumulation zone where volume is high. Area B captured the complete zone A in the accumulation. Here Smart Money was taking time and entering slowly and although accumulation was not completed yet it broke the middle level but couldn’t sustain above it and price came again to the Support Level . Now this was the area C where Remaining Accumulation Gets Completed. As major accumulation was done in area B and a small portion of accumulation completed in area C that is why Area C had less Volume .

(II) Zone B: This zone was created between the ranges of 230-350. Significance of this zone starts from the break out of Middle Level. When price broke the Middle Level and enters in this zone retail trader starts buying to capture the upside rally and smart money tries to book profit. Plotted on chart with Long Yellow Arrows.

3) Resistance Level: In November 2010 SBIN made its life time high of 351 and after almost 10 years has been passed but SBI could not sustain above it. Although it tries to broke this level 3 times but couldn’t manage above it. Now in year 2020 very unusual volume has been seen in Accumulation Zone.


Unusual Volume Analysis: There are Two Times is history when SBIN recorded Unusual Volume , 1st time when SBI IPO came and 2nd in year 2003-04. Highest volume was seen in History of SBI at the time of listing on exchange. In year 2003-04 volume was “Half” as compared to volume reported at the time of listing at that time price was trading near 45-50 and after that it touched the high of 230 at the end of year 2007. In almost 4 years SBIN reported almost 500% return.
Now when we compared it with recent volume activities in year 2020 then we will find that volume in year 2020 is almost 70% as compared to listing on exchange in year 1999.
Now if we compare the Volume and Price Movement together then we see that when there was 50% of lifetime highest volume in year 2003-04 and then SBIN reported almost 500% gain in price, so in present when Volume is around 70% of lifetime highest volume then there are very-very high chances that SBIN is preparing itself for a Long Bull Run in coming years.

Delivery Analysis: If you do your homework and will see the delivery percentages then you will find it very interesting. Normally average range of delivery percentage in SBIN is around 18-21% but if you look at the delivery percentage highlighted areas A, B, C, D and E then you will find the average delivery percentage is around 27-30%. Sometime it crossed above the 40% of traded quantity in a particular day which is very high as generally we don’t see such kind of activity in especially in large cap companies. This type of activities will not come to your screener or in radar as well until and unless you don’t do analysis manually because normally delivery percentage in large cap in low due to high liquidity and traded quantity compare to small and mid-cap companies.

Unusual Volume of Year 2020 is almost double the Unusual Volume of year 2003-04. So based on historical analysis we can assume that after breaking the Middle Level of 230 and sustaining above the level of 350 we can expect 400-500% rally in few years from recent levels. But if SBI broke the Support level of 150 and manages to sustain below it then scenario can be different but this much of Heavy Unusual Volume for sustainable period is only sufficient for expecting the positive break out.

Based on Monthly analysis the some more consolidation is required in Zone A for few weeks or months. Weekly closing above 230 levels gives the positive break out and will look for Entry. Based on volume analysis we can take partial entry near the Support Level of 150 with 10% of Stop Loss and will add reaming on break out of 230. After sustaining above 350 levels we may also think to add fresh quantity.

Dear all this analysis is only for educational purpose. Consult your advisor before any investment.

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Comments

Good Analysis-Keep going
+1 Reply
Thank you.sir
+1 Reply