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With the broader market sell-off on Thursday, banking stocks also plunged. Among the losers was Karnataka Bank, which tumbled 5.7 per cent breaching a key support at ₹118. Traders with a short-term perspective can consider selling the stock at current levels. The stock has been on a medium-term downtrend from the May peak of ₹150 levels, forming lower peak and troughs. The short-term trend is also down. Further, the stock is hovering well below its 50- and 200-day moving averages. The relative strength index on the daily chart is featuring in the bearish zone implying downward momentum.
Indicators on the weekly chart are also trending downwards backing the stock’s downtrend. Our short-term outlook on the stock is bearish. It can extend its decline and reach the price target of ₹108.5 and ₹106 levels. Sell the stock with a stop-loss at ₹115.5 level.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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