Chart Check: IndusInd Bank may hit new 52-week high, factors that make an attractive buy

The momentum helped the stock to breakout from the neckline of the pattern and was placed above Rs 1,160 levels last week on 12th May 2023. The stock is making higher highs and higher lows on daily charts – which is a bullish sign.

The stock hit a 52-week high of Rs 1,275 on 20th September 2022, but it failed to hold on to the momentum. The stock made its first low at Rs 1,050 in February 2023 and it slipped below Rs 1,000 in March 2023.

IndusInd Bank stock which is part of the S&P BSE Sensex index bounced back but it failed to hold on to the momentum and made another low above Rs 1,050 in May which resulted in the formation of an inverse head and shoulder formation on daily charts.

An inverse head and shoulder pattern is the mirror image of the head and shoulder pattern and is a bullish signal.

It is defined as three bottoms with the middle bottom (head – marked as H) significantly lower than the other two bottoms (left and right shoulders – marked as S). Also Read

ET CONTRIBUTORS

In terms of price action, the stock is trading above most of the crucial short and long-term moving averages such as 5,10,30,50,100, and 200-DMA on the daily charts.

“IndusInd Bank is poised to return to its pre-crisis levels of Rs 1,600 (CMP Rs 1,220), from which it soared and then plummeted. The weekly RSI has found good support near 50, indicating that the stock is not yet ready to enter the bearish zone,” Suraj Bathija, Founder and CSO at AlgoBulls, said.

The weekly RSI has shown an upward breakout of the down-sloping trendline. The weekly candle low, has seized the 52-week SMA as solid support with good volumes.

ET CONTRIBUTORS

“On a daily basis, the stock demonstrated a breakout of a slant head and shoulder pattern. In addition, the daily RSI is forming an upward-sloping trendline to strengthen the chart pattern,” he added.

“The shorter time frame uptrend is bolstered by the fact that the daily RSI is approaching overbought territory. The close is above the SMA 20, which represents a monthly duration average, and is rising,” highlighted Bathija.

“Currently, one can have a bullish view in the uptrend where the momentum is strong where the CMP is Rs 1,187 with a target 1 of Rs 1,360 and target 2 of Rs 1,600, the stop loss can be placed around Rs 1,060 (period next 2-3 months),” he recommends.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)