Lakshmi Vilas Bank

We recommend a buy on Lakshmi Vilas Bank from a short-term perspective. It is clearly visible from the charts of Lakshmi Vilas Bank that it was on an intermediate-term downtrend from September 2008 to early March 2009 low (from Rs 110 to Rs 51), forming lower peaks and lower tops. However, the stock found support at around Rs 51, a 52-week low and reversed its trend. The stock has been on a short-term uptrend from this low.

On March 13, the stock almost jumped up by 5 per cent penetrating its intermediate-term down trendline as well as 21-day moving average. The daily relative strength index (RSI) is rising in the neutral region towards the bullish zone and the weekly RSI has entered in to the neutral region.

Moreover, daily moving average convergence and divergence (MACD) is signalling a buy. The price rate of change indicator has entered in the positive territory indicating buying interest.

Our short-tern outlook on the stock is bullish. We expect the stock’s short-term uptrend to prolong until it hits our price target of Rs 67 in the approaching trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 56.