The stock of IDBI Bank plunged 6.8 per cent on weak first quarter results on Wednesday. This has resulted in a strong downward breakthrough of a descending triangle pattern with base line at ₹88. Investors with a short-term perspective can consider selling the stock at current levels. After a strong rally in May, the stock encountered resistance at ₹115 in early June. Triggered by negative divergence in daily indicators, the stock changed direction. While trending down, the stock conclusively breached its 21- and 50-day moving averages in early July and is hovering well below them.
The relative strength index on the daily chart has entered the bearish zone from the neutral region. Other indicators on the daily chart are featuring in the negative terrain. Our short-term outlook on the stock is bearish. It can extend the ongoing downtrend and reach the price target of ₹81.5 and ₹79.5 in the forthcoming sessions. Sell the stock with a stop-loss at ₹87.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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