As I wrote many times in my blog, I am extremely bullish on banking sector for this year and banks have not disappointed my faith as most of the banks have declared excellent third quarter results.
The immediate trigger for banking stocks is cut in interest rate which is going to happen within next three months.
There are over 20 listed public sector banks and close to 20 listed private sector banks. It is a nightmare to track all these banks for retail investors. The wise strategy is to buy banking sector mutual funds to make sure that we don’t miss the bus this time.
Fortunately, when it comes to banking sector mutual funds there are only two mutual funds to consider viz, Reliance banking fund and UTI thematic banking fund. Both these funds have performed well in the last one year giving about 70% returns. I would be buying both these funds in equal quantities. UTI fund has more allocation to private banks compared to Reliance banking fund. Also UTI holds stocks like Reliance banking fund (growth) is available at about Rs 64 and UTI thematic banking fund (growth) is available at around Rs 33.
I will have definitely more weight age to banking stocks this year in my portfolio. Apart from the above mutual funds I have following stocks in my wish list. Axis bank, ICICI bank, Karnataka Bank, Kotak bank, South Indian bank, ING Vysya bank, Bank of Maharastra, Dena bank, Vijaya bank, Syndicate bak, Indian bank, HDFC.
Indian bank and Karnataka bank are at 52 week high and looks very strong in the current market. Both look good from trading perspective also. Indian bank can be bought at around 200 with a stop loss at 180 and Karnataka bank at around 260 with a stop loss at 240.
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