Axis Bank ready for a bull run

Axis Bank-Inverse H&S Pattern
source:www.icicidirect.com

We saw in last few days and also discussed in our post on Nifty Outlook that Nifty has already entered into new bullish zone after trading for several years in 5000-6000 range and now it is heading towards target of 7000-7100 in the coming months.

Banking stocks remained under pressure for quite some time due to adverse micro and macroeconomic factors but now the tide is turning
and major banking stocks have either reversed the trend to bullish mode or are on the verge of breakouts.

Axis Bank is such one stock which broken out of Inverse Head and Shoulders Pattern with good volumes.For the past few trading sessions the stock is trading above the neckline ( yellow trendline ) and sustaining above that level,thus ruling out any possibility of false breakout.Head and Shoulders patterns are usually considered very powerful patterns by the technical analysts and there always lies the high probability of achieving the targets given by the pattern.

Now as the concerns for the banking stocks are diminishing and inflation also expected to come under 6% in coming 4-6 months,this will further fuel the rally in banking stocks including high betas like Axis Bank.Axis Bank is already considered a blue-chip stock in the market with strong fundamentals and a capable management.Risk with these kind of stocks remains limited.So we expect a good rally in the stock in the near future.

Medium term traders or investors can consider taking positions in the stock in staggered manner near 1175 or on dips towards the 1000 levels (green trendline) for targets of 1575 and higher in the coming weeks,keeping a strict stop loss at 770.