Federal bank is worth banking on! Know why?

Federal bank is worth banking on! Know why?

by 5paisa Research Team Last Updated: Dec 12, 2022 - 12:17 pm 20.7k Views
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FEDERALBNK has soared nearly 4% on Tuesday.

The stock of Federal Bank surged nearly 4% on Tuesday’s trading session and has registered a breakout from its consolidation pattern. It traded in a range of Rs 105-110 for about 9 trading sessions. On Tuesday, the breakout was accompanied by an above-average volume greater than the 10-day and 30-day average volume. Moreover, the volumes rose for the third consecutive day, indicating a rising buying interest. With this, the stock has hit a fresh 52-week high at Rs 111.95. Such strong buying interest from the investors can be attributed to the strong growth aspects of the company. It reported 64% increase in its net profit YoY, while net interest income grew to Rs 1605 crore in Q1 FY2022-23 posted 2 weeks back.

Along with a strong price structure, the technical parameter also shows bullishness of the stock. The 14-period daily RSI (73.56) is in super bullish territory and shows strong strength in the stock. The ADX (40.77) is in an uptrend and the OBV continues to surge higher and shows good volumetric strength. The Elder Impulse system has charted a bullish bar, while TSI and KST indicators also indicate strong bullishness. The stock is currently over 7% above its 20-DMA, while it is 17% above its 200-DMA. In a nutshell, the stock is in a strong uptrend for the short and medium term and is expected to trade higher in times to come.

As per the price structure, we expect the stock to test the level of Rs 116 in the upcoming days, followed by Rs 125 in the medium term. However, keep a watch on Rs 103 as any fall below this level can induce weakness. It provides a good trading opportunity for the short term and swing traders can expect good gains from this stock.

Federal Bank is a private sector bank and has a presence in retail banking, corporate banking, wholesale banking and other financial services.

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