Wednesday, 19 November 2008

Kotak Mahindra Bank (Rs 308): Sell

We recommend a sell in Kotak Mahindra Bank from a short-term trading perspective. It is evident from the charts of Kotak Mahindra Bank that it has been on a long-term downtrend since its all-time high of Rs 1,435 recorded in early January. The stock has been forming lower troughs and lower peaks since. The intermediate and medium-term trend also is down for the stock. However, significant long-term support range is at Rs 240-250 levels. We observe that two weeks ago the stock had encountered resistance at around Rs 450 and resumed its downtrend. On November 17, the stock plummeted 9 per cent, conclusively breaching the 21-day moving average. Furthermore, the stock fell 10 per cent, accompanied with high volume on November 18. Both daily and weekly relative strength indices are featuring in the bearish zone. The daily moving average convergence and divergence is falling in line with the stock in the negative territory. Our short-term outlook for the stock is bearish. We anticipate the stock to decline further until it hits our price target of Rs 276 in the short-term. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 324.

Source: TheHinduBusinessLine

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DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.