Stock watch: Karnataka Bank gives a consolidation breakout

Interestingly, the leading indicator, 14-period daily RSI has given a falling channel breakout on the daily chart, which is a bullish sign.

The stock of Karnataka Bank Limited has formed a Doji candlestick pattern as of September 16, 2021, and thereafter slide into the consolidation. During the period of consolidation, the stock has oscillated in the range of Rs 75.75-Rs 64.50 level.

On Wednesday, the stock has given a 36-days consolidation breakout on the daily chart. This breakout was supported by a robust volume of nearly 4 times of 50-days average volume, which indicates important buying interest. The 50-days average volume was 40.70 lakh while on Wednesday the stock has registered a total volume of 1.51 crore.

All the moving averages based on trade set-ups are showing a bullish strength in the stock. Daryl Guppy’s multiple moving averages is suggesting a bullish strength in the stock. The stock is trading above all the 12 short and long term moving averages. The averages are all trending up, and they are in a sequence.

Interestingly, the leading indicator, 14-period daily RSI has given a falling channel breakout on the daily chart, which is a bullish sign. The weekly RSI has given neckline breakout of inverted head and shoulders pattern. The weekly MACD stays bullish as it is trading above its zero line and signal line. The weekly MACD histogram is suggesting a pickup in upside momentum.

Going ahead, on the higher side, the level of Rs 82.50 will act as a stiff resistance and on the downside, 20-day EMA will act as strong support for the stock. The 20-day EMA is currently placed at Rs 71 level.