Federal Bank

We recommend a sell in Federal Bank from a short-term perspective. From the charts of the Federal Bank it is clearly visible that after recording a 52-week low of Rs 163 in mid July, the stock was on an uptrend till Rs 232.

The stock could not get past the resistance at Rs 232 and formed a hanging man candlestick pattern. This pattern is a bearish reversal pattern, signalling short-term bearishness. Subsequently, the stock reversed by declining 4 per cent on August 14. The daily relative strength index has entered the neutral region after touching the overbought levels.

The stock is currently testing the short-term up trend-line and it is on the brink of penetrating this line. Our short-term forecast for the stock is bearish. We expect the stock to decline until it hits our price target of Rs 190 in the upcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 226.