Pvt Bank Breaks Below Key Support: Investors Eyeing ‘New Shorts’!
Public banks have had a good time for the last few sessions. The itself touched a new lifetime high of 41,948.9 in yesterday’s session, while the index also surged to a multi-year high of 3,858.4 in today’s session. However, Private banks have clearly been laggards in participating in this banking rally.
Today, IndusInd Bank Ltd. (NS:), which is a large-cap bank with a market capitalization of INR 89,087 crores is scaring investors with an important breakdown on the daily chart. The bank has shown underperformance during the last many sessions and today it seems to be gearing up for a fresh leg of selling.
Image Description: Daily chart of IndusInd Bank
Image Source: Investing.com
The stock has been trading almost sideways since the first week of September 2022 with a slight downward bias. The peaks during this tenure kept on declining and every new peak was lower than the previous one, depicting an increasing selling pressure. However, the troughs remained almost at the same level as investors kept on buying the dip.
This price action led to the formation of a descending triangle chart pattern on the daily time frame, the breakdown of which is seen today. The stock plunged below the key support of INR 1,130 – INR 1,125 and is currently trading 2.26% lower at INR 1,122, by 12:43 PM IST. The stock is trying hard to recover back above this support but it seems like buyers are also giving up on hope now. A sector-wide selling in today’s session including banks could be a reason for this.
Nonetheless, if the stock manages to close below the above-mentioned support zone, then the breakdown would be confirmed. According to the width of the triangle, the stock could tank to triple digits in the coming weeks. If the broader markets continue to correct from here, then these levels could come faster than expected. There is decent support around INR 1,040 which traders need to watch as demand from this zone could also put a break on a further downfall from there.
If the stock turns around and rises back above the falling trendline resistance of the triangle pattern, then a rally could be materialized but that seems unlikely as of now.
Public banks have had a good time for the last few sessions. The itself touched a new lifetime high of 41,948.9 in yesterday’s session, while the index also surged to a multi-year high of 3,858.4 in today’s session. However, Private banks have clearly been laggards in participating in this banking rally.
Today, IndusInd Bank Ltd. (NS:), which is a large-cap bank with a market capitalization of INR 89,087 crores is scaring investors with an important breakdown on the daily chart. The bank has shown underperformance during the last many sessions and today it seems to be gearing up for a fresh leg of selling.
Image Description: Daily chart of IndusInd Bank
Image Source: Investing.com
The stock has been trading almost sideways since the first week of September 2022 with a slight downward bias. The peaks during this tenure kept on declining and every new peak was lower than the previous one, depicting an increasing selling pressure. However, the troughs remained almost at the same level as investors kept on buying the dip.
This price action led to the formation of a descending triangle chart pattern on the daily time frame, the breakdown of which is seen today. The stock plunged below the key support of INR 1,130 – INR 1,125 and is currently trading 2.26% lower at INR 1,122, by 12:43 PM IST. The stock is trying hard to recover back above this support but it seems like buyers are also giving up on hope now. A sector-wide selling in today’s session including banks could be a reason for this.
Nonetheless, if the stock manages to close below the above-mentioned support zone, then the breakdown would be confirmed. According to the width of the triangle, the stock could tank to triple digits in the coming weeks. If the broader markets continue to correct from here, then these levels could come faster than expected. There is decent support around INR 1,040 which traders need to watch as demand from this zone could also put a break on a further downfall from there.
If the stock turns around and rises back above the falling trendline resistance of the triangle pattern, then a rally could be materialized but that seems unlikely as of now.
