Technical Analysis

Federal Bank (₹108.5): Buy

Yoganand D BL Research Bureau | Updated on June 27, 2019 Published on June 28, 2019

Investors with a short-term horizon can buy the stock of Federal Bank at current levels. Since taking support at ₹67 in early October, the stock has been in an intermediate-term uptrend, forming higher peaks and troughs. Medium as well as short-term trends are also up for the stock.

In mid-May the stock breached a key resistance at ₹100 and continued to trend upwards. Last week, the stock took support at around ₹100 and resumed its uptrend. On Thursday, the stock had conclusively surpassed a key resistance at ₹105 as well as the 21-day moving average. The stock trades well above its 21- and 50-DMAs. There has been an increase in daily volume over the past one week.

The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI continues to feature in the bullish zone. Besides, the daily and weekly price rate of change indicators hovers in the positive territory implying buying interest.

The short-term outlook is bullish for the stock. It can extend the uptrend and reach the price targets of ₹113 and ₹115 in the upcoming sessions. Buy the stock with a stop-loss at ₹106.

Podcast: Federal Bank

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

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