The weekly chart analysis indicates that Kotak Bank is on the verge of a Rising Channel pattern breakout too. In addition, it has also managed to sustain above its short-term averages which further accentuates our bullish stance on the stock, says Hadrien Mendonca of IIFL.
By Hadrien Mendonca
IIFL
What a comeback! Markets zoomed on Thursday after the Reserve Bank of India (RBI) kept the key policy rate unchanged at 6% for the fourth consecutive time.
The Apex bank also reduced the inflation forecast which triggered a rally in all the interest rate sensitive sectors.
The sentiment also got a fillip after fears of US-China trade war eased after the US expressed willingness to negotiate a resolution to the trade war with China post the Chinese retaliation.
The Bank Nifty too has broken out from a falling wedge pattern and to add to the optimism it has also managed to close above the 200-DEMA of 24470 levels.
Going forward, 25000 is the immediate peak and is also the psychological mark that will act as a strong resistance for the Bank Nifty.
Kotak Mahindra Bank: BUY| Target 1240| Stop Loss 1057| Returns 11%
In the past two months, the stock has gone through multiple whipsaws that have resulted in a formation of Symmetrical Triangle pattern on the daily chart. A close above Rs 1090 has also confirmed the breakout with the rise in volumes.
The weekly chart analysis indicates that Kotak Bank is on the verge of a Rising Channel pattern breakout too. In addition, it has also managed to sustain above its short-term averages which further accentuates our bullish stance on the stock. We expect Kotak Bank to rally towards its potential target of Rs 1240 levels.
Disclaimer: The author is Senior Technical Analyst, IIFL. The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.