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Investors with a short-term perspective can consider buying the stock of Karnataka Bank at current levels. The stock has been on a strong intermediate-term uptrend ever since it took support at ₹70 in February 2016. The corrective fall in November found support at around the 50 per cent Fibonacci retracement level of its prior uptrend at ₹100. Last week, the stock breached it 200-DMA and started testing the resistance at ₹113.
On Tuesday, the stock jumped 2.6 per cent with above average volume, conclusively breaching the key resistance at ₹113. Daily indicators, such as price rate of change and moving average convergence divergence are featuring in the positive terrain, implying bullish momentum.
The short-term outlook of the stock is bullish. It can extend its uptrend and reach the price targets of ₹121 and ₹124 in the ensuing trading sessions. Buy the stock with a stop-loss at ₹113.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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