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ICICI Bank: short-term trend – Bullish

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ICICI BANK

Symbol: ICICIBANK

Suggestion: Buy, Stop loss at Rs. 518
Open             550.00
High              550.90
Low               515.15
Last Price    520.75

Fig. 1: Price movement - ICICI Bank

Fig. 1: Price movement - ICICI Bank

Fig. 1 shows the price movement bar chart for ICICI Bank. The green line is SMA(200), and the brown line is SMA(20). As seen, the price is well above the 200 and 20 day SMAs (Simple Moving Average). This clearly indicates that the stock is running in the bullish phase. The only problem over here is that the SMA(20) line is rising at a pace more than the SMA(200) line, and thus is expected to cross it in coming sessions. This will shorten the life span of bulls as it will mean that the stock is in bullish phase for a short term, while the long term trend is bearish.

Fig. 2: ADX - ICICI

Fig. 2: ADX - ICICI

The ADX chart (Figure 2) clearly shows that the stock is in the trending phase, as the current value is 28.86. This means that the trend followers can be used for further projections. This has been done below.

Fig. 3: MACD - ICICI

Fig. 3: MACD - ICICI

The MACD chart (Fig 3) clarifies the picture a bit. The MACD line is above the EMA(9) or the base line. This clearly indicates that in the short term, Bulls have an edge over the Bears. But point to note is that the rate at which the base line is rising is pretty more than the MACD line, and thus it means that a trend reversal (from Bullish to Bearish) is expected to happen in the coming sessions. Therefore, it is better to take advantage of the current move in the short term.

It is adviced to buy this stock at the current proce with a strict stop loss at Rs. 518 (this is necessary because the trend is expected to reverse in some time). The target price being Rs. 535.

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One Response

  1. ICICIBANK @ 434 (240404) gets 985 pancha-tattva points and its safe to buy at this rate but not beyond 490, so book profits beyond that level.

    Thanks.