Sizzling Stocks: Karnataka Bank (Rs 106.2)

During the week, the RBI Governor announced that the central bank would soon unveil new norms for the entry of foreign banks, allowing them to take over local banks. This led to shares of mid-and-small sized banks move higher by 10-20 per on Monday. Karnataka Bank was one such banking stock that surged 17 per cent with extraordinary volumes. Due to subsequent profit taking, the stock closed the week with 14 per cent gain.

Since the August 2013 low at Rs 69, the stock has been on a medium-term uptrend. It breached its key resistance at Rs 100 last week. It hovers above its 21- and 50-day moving averages. This uptrend will encounter resistance at Rs 115 in the short-term. A breakthrough of this resistance will push the stock higher to Rs 125. Conversely, a fall below Rs 100 can pull the stock down to Rs 90 in the near-term. Next supports are at Rs 82 and Rs 73 levels.

Bharti Airtel (Rs 356.6)

On Friday, Bharti Airtel acquired 100 per cent stake in Wireless Business Services Private Limited, a venture founded by Qualcomm Inc. Its shares rose 2.3 per cent accompanied by heavy volumes on Friday. For the week, the stock has gained 6.6 per cent with good volumes. It breached its 21-day moving average during this rally and hovers above its 50-day moving average.

Indicators in the daily chart have entered the bullish zone, implying upward momentum. The medium-term trend has been up since the low at Rs 274 in June 2013. Nevertheless, the stock is now testing the key long-term resistance at Rs 360. It has to decisively break this resistance to move to Rs 380 and then to Rs 400 in the medium-term. Key support zone is between Rs 330 and Rs 340 and then at Rs 320. Long-term supports are positioned at Rs 300 and Rs 280 levels.

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