Chart Check: Down 15% from May 2023 highs, what’s in store for Kotak Mahindra Bank?

economictimes.indiatimes.com:

Kotak Mahindra Bank, part of the private banking space, has been under pressure for the past few months as it reversed its gains after hitting a 52-week high in May 2023. Short-term traders can look to go short on the stock for a potential towards Rs 1,600 level in the next few months, suggest experts. The private banking stock hit a 52-week high of Rs 2,063 on 31st May 2023, but it failed to hold on to the momentum.

The stock closed at Rs 1,750 on 18 August 2023 which translates into a fall of over 15%. It took support above Rs 1,800 levels initially but saw a breakdown from crucial short- and long-term moving averages in July in weekly charts. The private banking stock has been making lower lows for the past 4 weeks on the weekly charts and experts are of the view that there is room for further downside amid weakness seen in the banking space.

The stock price of Kotak Bank fell more than 7% in the past 1 month compared to over 3% fall seen in the NiftyBank, Trendlyne data showed. Although the Relative Strength Index suggests that the stock is trading near oversold levels, hence, some bounce back could be on cards. Bears are likely to remain in control as long as Rs 1,800-1,820 level are not breached on the upside.

The daily Relative Strength Index (RSI) is at 28.3. RSI below 30 is considered oversold. This implies that stock may rebound.

The daily MACD is below its signal and center line, this is a strong bearish indicator. In terms of price action, the stock is trading below its short- and long-term moving averages on the daily charts. The Nifty50 index is down under a downward trajectory for the past 20 trading sessions with a loss of little above 3%.