Wednesday, 16 September 2009

Karnataka Bank (Rs 135.2): Buy

We recommend a buy in Karnataka Bank from a short-term horizon. It is evident from the charts that the stock, after encountering key resistance at Rs 155 in late May, began to decline. It was on a medium-term downtrend until it found support at around Rs 124 in late August. Subsequently, the stock commenced trending up, resuming its intermediate-term uptrend that started from the March low of Rs 55. The stock surpassed its 21-day moving average recently and it breached its 50-day moving average on September 15. Moreover, we notice that there is an increase in volumes over the past three trading sessions. The daily relative strength index (RSI) has entered the bullish zone and the weekly RSI is on the verge of entering this zone. Our short-term outlook for the stock is bullish. We expect it to rally further until it knocks our price target of Rs 149 in the approaching sessions. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 128.

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.