The attached chart of this Private Sector-Bank participant (Federal Bank) is indicating a beginning of a sharp weakness in the stock price, which has jumped more than 50% in last six-seven months and is currently trading within 8.0% of its all time highs of 122.40 touched on 12th-June-2017.
The gradual upmove of the last 6-7 months seems to have completed, as the stock price has started to show weakness from the highs during this week.
Initial evidence of a beginning of declines is visible, as the stock price has lost momentum near Upper channel line (2 standard deviation from the ) and trying to reverse towards its median levels.
We also observed that the stock is in course of forming a Triple Top Chart pattern with highs of 120(April 2017), 122.40(June 2017) & recent highs of 121.40 as on (July 2017), however a break below 110 could confirm the above said pattern.
On the , A “Bearish engulfing” pattern was formed by the stock. on 26/07/2017 with rise in volumes and “Three outside down” pattern was formed on the next following day and is considered as reversal pattern.
14-period weekly is seen crossing below 70 levels, weekly line has already crossed below signal line which is signalling momentum going forward for the stock.
Based on the above technical observation, we
expect the stock price to head lower towards the mean levels in the coming months, hence suggest a Sell at CMP and at any rises (price range 115-118), stoploss is placed just above 126.