Stock in focus: Is RBL Bank ready for a trend reversal?

RBL Bank has been on a rough path since May 2019. But is it signalling towards change in trend? Let’s find out.

Quarter ended September 30, 2021, RBL bank’s total deposits jumped 17% to Rs 75,588 crore as compared to Rs 64,506 crore in the same quarter last year. Their Current Account-Savings Account (CASA) ascended by 33% Year-on-Year (YoY) to Rs 26,734 crore in the recent quarter. The Q1 FY22 numbers of RBL Bank were not so enticing. In Q1 FY22 RBL Bank's net loss on a standalone basis stood at Rs 459 crore as against a net profit of Rs 141 crore in Q1 FY21. On the other hand, its total income in Q1 FY22 jumped 4.92% to Rs 2,721 crore from Rs 2,592.73 crore in the same quarter last year.

Having said that, the stock has been on a rough path since May 2019. However, the stock currently is trading near its downward trendline, breaching and thereby sustaining would mean trend reversal. Even if the price breaches this downward trendline, two major resistances are waiting to welcome the price. The immediate resistance is placed at 226.40, one at 246.65 which is also 23.6% Fibonacci level and finally at 274.30. Breaching these resistances would mean more bullishness in this stock.

Looking at the momentum indicator Relative Strength Index (RSI), then it is comfortably trading above 50, whereas its 20-Week Exponential Moving average (EMA) is at 46.82. Rate of Change (ROC) seems to be in full action breaking its three-month-old down trendline. However, if we look at Moving Average Convergence Divergence (MACD), then it is still into negative territory, but quite near the neutral line. Moreover, it has also given positive crossover last month in the negative territory.

RBL Bank today opened at 205, made a high and low of 207.4 and 200, respectively. At the time of writing RBL Bank was trading near its high.