On this Daily Chart, we can see that Kotak has made a recent swing low of 1546 on Friday after losing support from its 1650 level. The results were out yesterday and Kotak has announced 26% increase in profits beating the market estimates. This should potentially cause a reversal in price going forward. In the short term, price is likely to touch the 200D SMA (purple line) which also coincides with a trend line (in blue) creating an upside of about 15% from current levels.
Indicators:
1. The EPS chart shows solid growth while the P/E is almost at a decadal low of 16.9
2. The RSI has bottomed out both in the Daily and Weekly
3. The price hit the lower threshold band of Fibonacci Bollinger Band (solid green line) indicating a possible bottoming out of price
4. The price is currently below both the 50D and 200D SMA, indicating short term bearish territory
Risks: The current downtrend can also continue in the next week and the next visible support is at 1450 implying a downside of 6%
Strategy: Given the growth drivers and a ridiculous valuation of the bank, the price is sure to make a reversal in coming days. Watch for the price action on Monday, and based on lower time frame price action, take entry. If the price comes down, towards 1450 levels, it should be used as an opportunity to build more positions instead of thinking about Stop loss and exiting.
Happy Trading!
Indicators:
1. The EPS chart shows solid growth while the P/E is almost at a decadal low of 16.9
2. The RSI has bottomed out both in the Daily and Weekly
3. The price hit the lower threshold band of Fibonacci Bollinger Band (solid green line) indicating a possible bottoming out of price
4. The price is currently below both the 50D and 200D SMA, indicating short term bearish territory
Risks: The current downtrend can also continue in the next week and the next visible support is at 1450 implying a downside of 6%
Strategy: Given the growth drivers and a ridiculous valuation of the bank, the price is sure to make a reversal in coming days. Watch for the price action on Monday, and based on lower time frame price action, take entry. If the price comes down, towards 1450 levels, it should be used as an opportunity to build more positions instead of thinking about Stop loss and exiting.
Happy Trading!