Can I enter in Federal Bank for a 10 per cent upside move?
BUY FEDERAL BANK ABOVE RS 84 ON A CLOSING BASIS.
Federal Bank is currently trading at Rs 80.70. Its 52-week high/low stand at Rs 116.75/Rs 67.05 made on January 15, 2018 and October 4, 2018, respectively. After hitting its 52-week high, the stock corrected sharply and halted its correction near the rising trendline on the monthly time frame. The stock formed a bullish engulfing-like candlestick pattern on the monthly time frame as on the month ended October 2018. On the weekly scale, the stock is consolidating near its downward slopping trendline resistance zone since last five weeks with relatively low volumes. Consolidation near resistance zone and rejection from lower levels are suggesting channel resistance is likely to break. The 14-period daily RSI is quoting at 59.52 and recently it has given positive crossover. Hence, we suggest buying Federal Bank only after it manages to close above Rs 84.