Short Term Buy Opportunity in Axis Bank

Axis Bank has been in a downtrend since mid of 2019. It has been forming lower low and lower high since then. Recently it has made a 6 year low of 286. After touching the 6 year low of 286 it is creating higher high and higher lows in a secondary trend. The formation of higher high and higher low formation in the secondary trend indicates that the stock is in an uptrend in the lower time frame that is Daily. Last week it has made a low of 400 and this week it has moved almost 10% from that low. This gain has come after the 4-week fall.

This week's gain from the lower level indicates that the stock may continue its short term uptrend. And will move above its previous high.

Technical Indications:

1. On the weekly chart OBV has taken a sharp move and crossed its previous high. This is the indication of accumulation in the stock.

2. Moved above its 100 SMA on 28th Sep

3.Closed above 20SMA on a weekly chart.

4.Forming bullish harami candlestick pattern on the weekly chart

5. Formation of the rising wedge pattern. This rising wedge will extend the stock to 575 level.

6. Fibonacci Retracement and Extension Relation:

Wave D retraced almost 61.8% of wave C, the extension of 61.8% retracement is 161.8%, so according to this extension, 161.8% comes at 575 level.

7. After heading to the 575 level it will also complete the ABCDE pattern. The completion of this pattern will push the market lower to some extend.

These are some positive indicators on the technical chart.

There are also some fundamental Indicators:

1. Turnaround companies- loss to profit QoQ. 1387Cr loss in March 2020 Quarter and 1112 Cr profit in June 2020 quarter.

2.Effectively using its capital to generate profit - RoCE improving in the last 2 years.

3.Company able to generate Net Cash - Improving Net Cash Flow for the last 2 years.

4.Book Value per share Improving for the last 2 years.

5.Company with Zero Promoter Pledge.

6.FII / FPI or Institutions increasing their shareholding.

7. Many Mutual Funds have increased their holding in Axis Bank in the last few quarters.

8.Brokers upgraded recommendation or target price in the past three months

These are the indicators that are generating interest in this particular counter over the next 7-8 weeks.

We are bullish on this stock for the next 2 months.

Do your own research also before taking any position.