This large-cap bank is now ready for the long-term breakout; watch out

A trendline drawn from previous highs identifies a breakout trendline level, signalling a potential breakout at Rs 1,070.

ICICI Bank Ltd. is a prominent player in the banking sector, offering a wide range of banking and financial services across various segments. With operations encompassing retail banking, wholesale banking, treasury operations, and more, the company has established itself as a key player in the industry. Additionally, its subsidiaries and ventures in areas such as insurance and securities further diversify its offerings.

Technical analysis In Wednesday's trading session, amid a market characterised by consolidation and a negative bias, ICICI Bank emerged as a notable outlier. The stock drew the attention of chartists due to its positioning within the higher range of a long-term consolidation pattern, accompanied by significant trading volumes. This positioning suggests the potential for a technical breakout of a continuation price pattern.

A closer examination of the daily chart reveals a consolidation phase spanning over two year's. Throughout this period, ICICI Bank's stock has traded within a wide range, forming higher highs and higher lows. Notably, the lower boundary of this consolidation aligns closely with the 200-day moving average (DMA) support level. A trendline drawn from previous highs identifies a breakout trendline level, signalling a potential breakout at Rs 1,070.

Stock performance In today's trading session, ICICI Bank witnessed buying interest, leading to a notable surge of approximately 2 per cent just below the breakout level. This surge was supported by above-average trading volumes, indicating strong buying momentum. Confirmation of the breakout would occur with a daily close above Rs 1,070 accompanied by increasing volumes. Based on the pattern, the stock's minimum target is estimated to be around Rs 1,340, suggesting a potential increase of over 25% from the breakout level.

Future outlook Given these technical factors, ICICI Bank presents an attractive buying opportunity that warrants careful consideration. As the company potentially prepares for a technical breakout, both investors and traders may find compelling reasons to include ICICI Bank in their investment portfolios.

Disclaimer: The article is for informational purposes only and not investment advice.