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DCB Bank Technical Analysis #97: Buy | Target Rs 193 | Arijit Banerjee

OUR RECOMMENDATION

CMP#178.75
IdeaBUY
Buy Range173 – 179
Target193 – 200
StopLoss*164.8
Duration15 – 20 Trading Sessions
Potential Return^8 – 12%
CMP#IdeaBuy RangeTargetStopLoss*DurationPotential Return^
178.75BUY173 – 179193 – 200164.815 – 20 Trading Sessions8 – 12%

# CMP – closing market price on Nov 25, 2019
* Maintain recommended StopLoss by daily closing basis.
   Once 1st target hit, reset StopLoss at 186.
^ The returns are calculated based on CMP#

COMPANY OVERVIEW

DCB Bank is an Indian commercial bank operates through Treasury operations, Retail Banking, Wholesale banking and other segments. The company offers different products such as Current accounts, savings accounts, fixed deposits, portfolio investment schemes, small credit, MSME credit, car and home finance etc. As of March 2019, the bank has operated through 333 branches and 504 ATMs across India. In Q2FY20 the company has reported net interest income of Rs.313.36 crore and Net Profit of Rs.91.41 crore as against net income of Rs.281.84 crore and net profit of Rs.73.44 crore in the corresponding period last year,  registering a growth of 24.47% in bottom line.

Stock Data
NSE CodeDCBBANK
IndexNifty Bank
52W High244.65
52W Low148
Face Value10
Relative Performance_DCB Bank vs Nifty Bank Index

TECHNICAL OBSERVATIONS (WEEKLY)

  • As shown in the Weekly chart, the long term trend is positive since 2017. Price had taken multiple support on the baseline along with price rise.
  • Current weekly low is just above the trendline. Based on the historical price pattern we may expect price to move upwards from here.
DCB Bank Weekly Chart
DCB Bank Weekly Chart

TECHNICAL OBSERVATIONS (DAILY)

  • The stock is seen consolidating above the baseline over the last few days indicating accumulation at the lower levels. 
  • The recent closing has formed Bullish Harami candlestick at its support. Such a candlestick formation indicates bearish trend may be reversing and it may be a good time to enter into a long position.
  • A daily momentum indicator Stochastic showing positive crossover just above its oversold level (20), points out for a positive breath in the stock.
DCB Bank Daily Chart
DCB Bank Daily Chart

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MONEY MANAGEMENT AND TRADING RULES

1)  It’s advisable not to enter/exit beyond the recommended range.
2)  Strictly follow the StopLoss as mentioned. Honour it.
3)  Use trailing StopLoss to retain profits.
4)  Diversify trading capital into our other technical recommendations.
5)  Risk only the money what you can afford to lose. Hedge accordingly.

ANALYST SUMMARY

This research analysis is prepared by Arijit Banerjee, CMT, CFTe. An engineering graduate developed an early interest in Trading since the age of 20. He is a Chartered Market Technician (CMT) accredited by CMT Association USA, the leading global authority of Technical Analysis and also has been honoured by Certified Financial Technician (CFTe) from the International Federation of Technical Analysts (IFTA), USA. His contribution to the market research was recognized by SEBI, the Regulatory Body of Indian financial market and given him the registration number INH300006582 as a Research Analyst. Over the years, he has gained experience in Technical Analysis with a demonstrated history of working in different asset classes. Himself as a trader, he has trained and continues training novice and experienced traders to become successful, confident and profitable in the financial market.

Disclosure

The views expressed herein are based solely on information available publicly/internal data/other sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. The recommendations provided herein is solely for informational purposes and are not intended to be and must not be taken alone as the basis for an investment/trading decision. Trading and investing are subject to market risk and the securities discussed and opinions expressed herein may not be suitable for all investors. To read the full disclosure, please click here.

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