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Investors with a short-term horizon with a contrarian view can buy the stock of CSB Bank at current levels. The stock has been in a medium-term downtrend since recording a 52-week high at ₹314 in early December 2019.
Breaking the key support level of ₹200 in early January this year, the stock continued to trend downwards. However, after registering a new low as well as the 52-week low at ₹160 on February 24 , it reversed direction triggered by positive divergence on the daily relative strength index and price rate of change indicator.
On Wednesday, the stock jumped 7 per cent accompanied by above average volume breaking above a key immediate resistance at ₹170. With this rally, the daily relative strength index has entered the neutral region from the bearish zone.
The daily price rate of change indicator is charting upwards, recovering from the oversold territory. The stock is likely to breach its 21-DMA. As the stock has decisively breached the immediate resistance and also the indicators on the daily chart heading northward, the near-term outlook appears to bullish. The stock can extend the up-move and reach the price targets of ₹184 and ₹188 in the ensuing trading sessions.
Trader with a contrarian view can buy with a stop-loss at ₹172 levels.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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