Equitas Small Finance Bank was the second biggest Nifty 500 gainer despite volatility in the broader markets, rising 9 percent to Rs 69.55 on February 23, its best closing in more than 19 months.
The stock formed a robust bullish candlestick pattern on the daily charts with above-average volumes, making higher highs, higher lows. It gained for the fifth straight session.
On February 21, it broke out of the long downward sloping resistance trendline adjoining highs of July 12 (2021 - record high of Rs 76.75), January 4 and February 20 this year, consistently trading above all key moving averages.
The momentum indicator relative strength index 14 was at more than 80 level and moving average convergence divergence, with a positive crossover, was well above the equilibrium level, reflecting a positive mood among participants. Caution is called for as both are in oversold territory now.
"Equitas is currently trading at 52-week high levels and maintaining higher top higher bottom formation in all time frames like daily, weekly & monthly charts, which tells that the stock already is in strong momentum," Vidnyan Sawant, AVP - Technical Research at GEPL Capital said.
The stock broke out of a Cup & Handle pattern on the daily charts, signalling a continuation of the prior uptrend, and the breakout is confirmed as it is accompanied by higher volumes, he added.
The prices are continuously hovering near the upper Bollinger band, which indicates rising volatility.
"Going ahead we expect the prices to move higher till the level of Rs 76-95 where the stop-loss must be Rs 58 on the closing basis," Vidnyan said.
On the Fundamental
In an exclusive interview with Moneycontrol recently, Equitas SFB MD and CEO PN Vasudevan said the bank had expressed intention to procure a universal bank licence and was in touch with the banking regulator. This could be the reason for the rally in stock price since February 20.
Equitas was planning to ramp up investment in technology, Vasudevan said, adding the bank was confident of its lending business.
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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