The attached chart of this Public Sector-Bank participant (Indian Bank) is indicating a beginning of a sharp weakness in the stock price, which is trading within 6.0% of Two Year High of 365.0 touched on 16-May-17.
The gradual upmove of the last 5-6 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.
Dark cloud cover pattern was formed by Indian Bank on 17/05/2017 and is considered as reversal pattern.The formation of candle in the last trading session, further confirms this patterns reliability.
However, in this process we also observed prices making higher highs while indicator ( ) makinhg lower lows resulting into “Regular Divergence” which is signaling a pause for further upside of the stock.
We believe the stock has the potential to move lower in the coming weeks as it attempts to test its mean levels near 320 . We therefore recommend a Sell at CMP and selling more on any rises. Our entry levels, along with stop loss and targets have been mentioned above.