On the robust rally of nearly five percent in ICICI Bank after a consolidation phase in the previous session, market analysts observe that the potential movement following a breakout from such consolidation phases could be approximately twice the width of the consolidation range.
Applying this principle to ICICI Bank, "we can reasonably set a target for the stock at around Rs 1,280, Jigar S Patel, Senior Manager - Equity Research, at Anand Rathi said in an interview to Moneycontrol.
Jigar, who has more than nine years of experience in technical research, believes the recent price action of YES Bank indicates a significant development in its long-term trend. Based on this technical analysis, investors may consider initiating long positions in YES Bank within the price range of Rs 25 to 28, he advises.
What is your trading strategy for ICICI Bank and State Bank of India?
After a prolonged period of consolidation lasting 32 trading sessions, during which ICICI Bank's stock price traded within a relatively narrow range of Rs 1,050 to Rs 1,120, a significant development has occurred. The stock has successfully breached this consolidation range and is currently hovering around the Rs 1,160 level.
From a technical standpoint, market analysts often observe that the potential movement following a breakout from such consolidation phases could be approximately twice the width of the consolidation range. Applying this principle to ICICI Bank, we can reasonably set a target for the stock at around Rs 1,280. This target reflects the anticipated magnitude of the breakout move beyond the previous range. In light of this bullish outlook, a strategy of buying on dips is recommended for investors interested in entering or increasing their positions in ICICI Bank.
In the case of State Bank of India (SBIN), there has been a notable upward movement, amounting to a 100-point increase over the past seven trading sessions. This surge translates to a substantial gain of approximately 13 percent to 14 percent. However, it's crucial to note the emergence of a Bearish Butterfly pattern near the Rs 835-840 zone on the chart. The presence of this pattern typically indicates a potential reversal in the ongoing upside, suggesting that the stock's upward momentum might be losing steam.
Given this technical signal, investors may consider the prudent strategy of booking profits on their SBIN positions. By doing so, they secure gains accrued during the recent bullish phase. Subsequently, investors can adopt a wait-and-watch approach, anticipating a meaningful correction in the stock's price. This approach allows investors to capitalise on potential buying opportunities that may arise as the stock retraces from its current elevated levels. Overall, this strategy aims to strike a balance between realising profits and positioning oneself advantageously for future market movements.
Do you advise taking exposure to YES Bank and IREDA?
The recent price action of YES Bank indicates a significant development in its long-term trend. After enduring a prolonged period of downward pressure, symbolised by a bearish trendline that persisted for 3.5 years, YES Bank's stock price has managed to break above this formidable resistance level. What's particularly noteworthy is that the stock has not only breached this long-standing bear line but has also retraced to retest it from above. This retest serves as a crucial confirmation that the breakout is indeed genuine, strengthening the conviction in the bullish outlook for YES Bank.
Based on this technical analysis, investors may consider initiating long positions in YES Bank within the price range of Rs 25 to 28. The upside potential for the stock is estimated to be around Rs 41, representing a substantial increase from current levels. However, it's important to manage risk effectively in trading or investing. Therefore, a prudent approach would involve placing a stop-loss order near Rs 19 on a daily closing basis. This investment view spans over the next 8 to 12 months, reflecting a longer-term perspective on the anticipated trajectory of YES Bank's stock price.
Currently, IREDA (Indian Renewable Energy Development Agency) is encountering significant resistance around the upper boundary of the Bollinger Bands, a technical indicator that depicts volatility and potential price levels. This resistance is reinforced by the presence of a bearish candlestick formation, which typically suggests selling pressure in the market. The conjunction of these two factors indicates a challenging environment for further upward movement in the stock's price in the immediate term.
Consequently, it is advisable for investors to exercise patience and await a pullback in the stock's price. This pullback is expected to lead the price down to around the Rs 160 level, offering a more favourable entry point for initiating long positions.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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