Technical Analysis

Karnataka Bank (₹79.1): Buy

Yoganand D BL Research Bureau | Updated on February 13, 2020

The stock of Karnataka Bank jumped 7 per cent accompanied by extraordinary volume on Thursday, breaching a downward sloping trend-line and also 21- as well as 50-DMAs decisively. This rally provides investors with a short-term perspective an opportunity to buy the stock at current levels.

After registering a 52-week low at ₹68 in October 2019, the stock started to consolidate sideways in the band between ₹68 and ₹78. Last week, the stock took support at around the lower boundary and begun to trend upwards. It has breached the 21- and 50-DMAs and hovers well above them.

The stock now tests the upper boundary at ₹78 with a positive bias. There has been an increase in daily volume over the past three trading sessions.

The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI hovers in the neutral region. Moreover, both the daily and the weekly price rate of change indicators have entered the positive terrain implying buying interest.

With the bullish momentum, the stock has the potential to trend upwards breaching the upper boundary. Targets are ₹83 and ₹85 in the short-term. Traders can buy with a stop-loss at ₹77.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

Published on February 14, 2020

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