Technical Analysis

Tech query: Can ICICI Bank stock cross ₹700 barrier?

Yoganand D | Updated on April 24, 2021

What is the technical outlook for the stock of ICICI Bank?

Prakash Chandra

ICICI Bank (₹570): The stock of ICICI Bank took support in the ₹270-₹290 band in the months of March and May 2020 and started to trend upwards. Since then, the stock has been in an intermediate-term uptrend. While trending up, the stock had decisively breached a key resistance at ₹400 in November 2020 and ₹550 in February 2021. However, after registering a new high at ₹679 in mid-February this year, it began to decline. It has been in a short-term downtrend since then. In mid-March the stock breached a key base at ₹600 and continued to trend downwards. But, it recently found support at the long-term base level of ₹550 and has marginally moved higher after testing this base level.

Key long-term support in the range between ₹540 and ₹550 can continue to cushion the stock in the near term. The stock needs to rally above the immediate resistance level ₹600 to show initial sign of bullish momentum. Such a rally can take it higher to ₹640. A strong break-out of ₹640 will underpin the intermediate-term uptrend and take the stock northwards to ₹680 and then to ₹700 over the medium term. Subsequent resistances can be experienced at ₹720 and ₹740.

On the downside, if the stock conclusively declines below the immediate base level of ₹540, it can reinforce the bearish momentum and strengthen the short-term downtrend. In that scenario, the stock can test next support at ₹500. An emphatic downward break of this base can pull the stock lower to ₹450 and then to ₹400 levels over the medium term. As long as the stock trades above the vital long-term support level of ₹400, the intermediate-term uptrend will remain in place. Investors with a long-term perspective can buy the stock in declines with a stop-loss at ₹390.

I bought stocks of Bharat Bijlee (BBL) at ₹1,718. Should I retain them or exit? Please advise.


Bharat Bijlee (₹1,145.8): In March 2020, the stock of Bharat Bijlee took support at around ₹424 and ended the long-term downtrend. Subsequently, it reversed direction and has been in an intermediate-term uptrend since then. Medium-term trend is also up for the stock. In early February this year, the stock conclusively breached a key resistance at ₹1,000 and continued to trend upwards. With the short-term trend being sideways with a positive bias, it now tests resistance at ₹1,200. An emphatic breakthrough of this barrier is needed to strengthen the uptrend and push the stock to ₹1,300 and then to ₹1,400 over the medium term. A further rally beyond ₹1,400 can extend the uptrend to ₹1,500 and ₹1,600 levels. Consider averaging the stock in declines with a stop-loss at ₹960. On the downside, the crucial base at ₹1,000 can provide support. That said, if the stock slumps below this base, that can drag it lower to ₹930 or to ₹900 levels. Next supports below ₹900 are at ₹870 and 830 levels.

Published on April 24, 2021

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