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The stock of SBI Cards, since confirming a double bottom chart pattern in the daily chart in early June, has been rallying with considerable momentum. It continues to form higher highs and higher lows and the price lies above the 21-day moving average (DMA) indicating a strong uptrend. Noticeably, after registering a fresh high of ₹848.7 on Monday it fell sharply on the same day. However, the 21-DMA support at ₹800 did not let the bears to go overboard and restricted the decline. After consolidating for a while, the stock now seems to have started to go upwards.
Corroborating the positive bias, the daily relative strength index and the moving average convergence divergence indicator in the daily chart are in their respective positive territory. Along with this, considering that the stock has always rallied well whenever it has bounced off the 21-DMA support, it is highly likely that a rally is imminent. Considering these factors, traders can go long in the stock with stop-loss at ₹814 and look for a target of ₹848.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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