The short-term outlook for the stock of Bandhan Bank is bearish. After tumbling over 11 per cent on Monday, the stock has been consolidating in a narrow range of ₹273 and ₹287. Broadly, the stock has been range bound between ₹240 and ₹350 for more than a year. Within this range, the stock has been coming down since mid-May. The chances are high for it to extend the fall from current levels towards ₹240 – the lower end of the range in the coming days. A break below ₹273 can trigger this fall. Resistance is in the ₹287-₹300 region which can cap the upside.
The 21-Day Moving Average (DMA) is on the verge of crossing below the 100-DMA. This is a negative signal and also strengthens the bearish case. Traders can go short at current levels. Accumulate shorts on a rise at ₹285. Keep the stop-loss at ₹296. Trail the stop-loss down to ₹275 as soon as the stock falls to ₹268. Move the stop-loss further down to ₹265 as soon as the stock touches ₹258 on the downside. Book profits at ₹245. A bounce from ₹240 will keep the sideways range intact and take the price higher.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)