Stock watch: Is RBL Bank all set for a trend reversal?

RBL Bank on a verge for a trend reversal?

RBL bank’s total deposits ascended 17 per cent in the quarter ended September 30, 2021, to Rs 75,588 crore as against Rs 64,506 crore in Q2 FY21. The Current Account-Savings Account (CASA) jumped by almost 33 per cent on a Year-on-Year (YoY) basis to Rs 26,734 crore in Q2 FY22. RBL Bank had not so exciting Q1 FY22 earnings. Moreover, the net loss of RBL Bank on a standalone basis in Q1 FY22 was at Rs 459 crore as compared with a net profit of Rs 141 crore in the same quarter last year. On the flip side, its total income ascended by 4.92 per cent in Q1 FY22 to Rs 2,721 crore.  

For quite some time the stock is not depicting a strong set of numbers. Which in turn were not allowing them to break their previous highs. In fact, since May 2019, it is on a serious downfall leading it to fall all the way, from 716 (May 2019) to 102 (April 2020). Having said that, the stock is currently trading near its downward trendline. If the stock breaches and sustains above the downward trendline, then it is showing a sign of a probable trend reversal. Ideally, the trend reversal can only be confirmed once it starts making higher highs and higher lows. Although, the price breaches this downward trendline, there are a few major resistances that this stock might face. The level of 226 would act as immediate resistance. Once this level is breached, there are two major resistances placed at 246.65, which is also 23.6 per cent Fibonacci level, and 274.30, respectively. 

Above is the weekly chart of RBL Bank Ltd.  

The Relative Strength Index (RSI), is trading above the level of 50, whereas its 20-Week Exponential Moving average (EMA) is at 46.82. Even the Rate of Change (ROC) seems to be supporting the RSI, as it breaks its three-month-old down trendline. Moving Average Convergence Divergence (MACD) still trading into negative territory near the neutral line. However, it gave a 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.