Consolidation pattern breakout & institution interest suggest stock may garner limelight again!

The stock of AU Small Finance Bank has gained nearly 1.5 per cent on Friday. It had opened at Rs 970 and made a high of Rs 995. On a weekly basis, the stock has gained 12 per cent and formed a bullish opening Marubozu as the opening price of the week was equal to the low of the week. The formation of this candlestick pattern in an uptrend suggests a continuation of the uptrend. Further, the stock has witnessed a breakout of stage 1b consolidation pattern on the back of robust volume on a weekly basis.   

From a technical standpoint, the stock is comfortably trading above its key moving average (20, 50 & 200-DMA). Interestingly, all the moving averages are placed in the desired sequence and are trending up. Further, recently, we have seen a crossover of moving averages as the short-term moving average i.e. the 20-DMA has crossed above the 50-DMA, which is positive for the stock.   

The above technical factors present a rosy picture and apart from this, one of the key factors, which is like a cherry on the top is the institutional interest in the stock. As per O’Neil methodology, the buyer demand is A, which indicates strong institutional interest. The FPI/FPI investors have increased their holding from 30.59 in September 2020 quarter to 32.78 per cent in December 2020 quarter. Similarly, the mutual funds have increased holdings from 9.53 per cent in September 2020 quarter to 10.42 per cent in December 2020 quarter.