Stock at Stake: Is Axis Bank on the verge of a breakout?
Axis Bank is forming bullish pennant chart pattern.
After a dramatic fall that was witnessed in March 2020, Bank Nifty made a dashing comeback and surged almost 23,900 points or 148 per cent in a matter of one year. Interestingly, its bullishness is still intact. One of the stocks that contributed to this move was Axis Bank. Axis Bank has a 12.36 per cent weightage in Bank Nifty. Presently, it is moving in a range-bound trade thereby forming a bullish pennant pattern on the weekly chart.
A bullish pennant pattern is a bullish continuation chart pattern, where before continuing its northward journey, stock price takes a breather and experiences consolidation. However, this pattern can be said complete only when the price breaks out from the upper slope of the triangle with higher volumes.
This is the case with Axis Bank. Though it is forming a bullish pennant pattern, the same is not complete as it has not yet given a breakout from consolidation. But it does make sense to keep it on your watchlist and monitor its price action. If the price breaks out from the consolidation it likely suggests a continuation of the trend.
The above image is the weekly chart of Axis Bank Ltd.
Moving on to indicators, the Relative Strength Index (RSI) is hovering above 50 and is currently placed at 61. Presently, it is not advocating any strength, but RSI of 65 and above would likely support the price movement. Moving Average Convergence and Divergence (MACD) despite being in positive territory, suggests nothing.
Axis Bank today opened at 800.60 level, making a high of 808.95 and a low of 792 level. At the time of writing, the stock was trading at the 806 level.