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Investors with a short-term horizon can buy the stock of DCB Bank at current levels. Since encountering a key resistance at ₹180 in early September, the stock started declining. However, the key support at ₹140 halted the down-move and cushioned the fall.
Taking support from this long-term base at ₹140, the stock bounced up, gaining 5 per cent on Wednesday. This up-move was also triggered by the positive divergence in the daily relative strength index which indicates a short-term trend reversal.
The daily RSI has entered the neutral region from the bearish zone and the weekly RSI is on the brink of entering the neutral region from the bearish zone. Though the medium- and short-term trends are down for the stock, the recent bounce-back from the long-term support makes the short-term outlook bullish. There has been an increase in volume traded over the past two weeks.
The stock can continue to trend upwards and hit the price targets of ₹156.5 and ₹160 in the ensuing trading sessions. Traders can buy with a stop-loss at ₹147.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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