Investors with a short-term perspective can consider buying the stock of Lakshmi Vilas Bank at current levels. The stock was on a medium-term downtrend from the November 2017 high of ₹174 until it recorded a 52-week low at ₹88 in this April. Taking support from this low, the stock changed direction triggered by a positive divergence in the daily and weekly indicators. Since then, the stock has been in a nascent uptrend.
On Monday, the stock jumped 8.6 per cent accompanied by extraordinary volume, decisively breaching its 21- and 50-day moving averages poised at ₹95. Moreover, this recent rally has also breached a key resistance level of ₹100. The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI has entered the neutral region from the bearish zone. Further, the daily as well as weekly price rate of change indicators feature in the positive territory implying buying interest.
The short-term outlook is bullish for the stock. It can extend its uptrend and hit the price targets of ₹108 and ₹110.5 in the coming trading sessions. Traders with a short-term view can buy the stock with a stop-loss at ₹101.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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