Chart Check: This private sector bank rose over 30% in 3 months; time to buy or sell? – Blue Barrows

Federal Bank, part of the private sector banking space, has rallied more than 30% in the last 3 months to hit a fresh 52-week high of Rs 132.65 on 17 October but the rally may not be over yet.

The technical setup suggests that the upside could get extended towards Rs 150 levels in the next few weeks, suggest experts. Short-term traders can look to buy the stock now or on dips, they say.

The stock with a market capitalisation of more than Rs 27,000 crore bounced back after retesting its 50-DMA on the daily charts around Rs 109 on 26 September 2022.

The stock has been making higher highs and higher low formations since then on the daily charts which auger well for the bulls. Supertrend indicator triggered buy on 12 October.

Recently, the stock also recorded a breakout above its resistance zone on the quarterly charts. The neckline of the pattern was placed at Rs 130.

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On the price front, the stock price of Federal Bank is trading above crucial short- and long-term moving averages such as 5,10,30,50,100, and 200-DMA which is a positive sign for the bulls.

The Relative Strength Index (RSI) is at 67.6. RSI below 30 is considered oversold and above 70 is considered overbought, Trendlyne data showed. MACD is above its center and signal line, this is a bullish indicator.

“Federal Bank, post its quarterly results, has broken out of its resistance zone placed at Rs 130 levels. It can be observed from the quarterly charts that the stock in the last quarter gave the highest quarterly closing in the past 5 years and is a clear outperformer in the banking space,” Sujit Deodhar, Head – Technical Analyst, Wellworth Share & Stock Broking, said.

“The stock on daily charts trading above all its short term (5 & 20 SMA) & long term moving average (50,100 & 200 SMA),” he said.

“Any dip towards support zone of Rs 123-117 offers a great buying opportunity in this stock for decent upside target placed at Rs 155 levels in the next 3-4 weeks, and a stop loss can be placed below Rs 108,” recommends Deodhar.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)