Lakshmi Vilas Bank

We recommend a buy in the stock of Lakshmi Vilas Bank from a short-term horizon. It is evident from the charts of the stock that from its March 2009 low of Rs 51.5, it has been on a longer term uptrend forming higher peaks and troughs. Twin supports at around Rs 70 (a significant long-term support level and uptrend line) arrested the stocks medium-term corrective decline that was in place between late September 2009 and late November 2009. The stock appears to have formed a solid base at around Rs 70 as it consolidated just above this support level for nearly three weeks and headed upwards. On December 24, the stock surged 6 per cent penetrating the downtrend line and 21-day moving average. Later on, it crossed over 50-day moving average, reinforcing the longer-term trend. We observe that the volumes are rising over the past four trading sessions. The daily relative strength index is hovering in the positive zone and weekly RSI has just entered this zone from the neutral region. The daily moving average convergence and divergence indicator has signalled a buy and is moving in the positive territory. Our short-tem outlook is bullish. We anticipate the stock to move up until it hits our price target of Rs 93. Traders with short-term perspective can consider buying the stock while maintaining a stop-loss at Rs 79.5.

via BL