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Home » Chart Idea – RBL Bank, another perfect short candidate to look for in coming days.
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Chart Idea – RBL Bank, another perfect short candidate to look for in coming days.

RBL Bank

It’s a common saying in the stock market – ‘Buy the Strongest and Sell the Weakest’. RBL Bank is another perfect candidate to look for shorting opportunities in the coming days. 

Chart Idea Update – RBL Bank is an Indian private sector bank headquartered in Mumbai and founded in 1943. It offers services across six verticals: corporate and institutional banking, commercial banking, branch, and business banking, retail assets, development banking and financial inclusion, treasury and financial market operations.

After analyzing the RBL stock data we get to know various aspect about the same: 

*After a strong rally in the market from the lower level, there is no sign of recovery seen in this stock, from the last couple of weeks stock is trading in a consolidation zone.

*The data of the stock is getting more bearish from the last couple of trading sessions as seen below:

*After analyzing the company stock data we get to know this that:

*After a strong rally in the market from the lower level, there is no Sign of recovery seen in this stock, from the last couple of weeks stock is trading in a consolidation zone.

*The data of the stock is getting more bearish from the last couple of trading sessions as seen below:

 

RBL Bank Rollover Analysis

Let’s understand the meaning of Rollover first; Rollover refers to traders shifting their future contracts positions from the near-month contract to the next-month contract. For example, traders are shifting their future contract positions from the April expiry to the May expiry.

In RBl Bank, Rollover percentage is increasing from the last trading sessions along with an increase in cumulative OI which indicates bearishness in this stock as marked in the given picture also.

In this COI = Cumulative Open Interest of 1st, 2nd and 3rd months

Analysis: Price going down with increasing COI = strongly bearish

RBL Bank
RBL Bank Open Interest Data

Volatility Analysis

The term Volatility is a statistical measure of the dispersion of returns for a given security or market index. In most cases, the higher the volatility, the riskier the security. Volatility is often measured as either the standard deviation or variance between returns from that same security or market index.

Volatility in the RBL Bank stock is also going lower and Increasing in COI along with a decrease in price which indicates bearish momentum in this stock as given in the picture also.

RBL Bank Closing Price Vs Open Interest Chart
Closing Price Vs Open Interest Chart

 

Recent Scenario 

On 24th April 2020 delivery in this stock i.e. of Rs. 62.20Cr which is less than the 5 Days Average delivery i.e. of Rs. 80.21Cr Which means that traders or big players are not interested in taking delivery positions in this stock as marked in the given picture also.

Delivery Volume Data
RBL Bank Delivery Volume Data

 

RBL Bank Option Chain Analysis

To find out the actual trend of stock in the market, we can use option chain data analysis.

Institutions and other big funds usually write/sell options and finding which strike prices have the most open interest can tell us the support and resistance of the market for that expiry.

If we talk about Option Chain in RBL BANK stock then the highest OI built up in 120CE (i.e. 1,114,500) and increasing OI in 70PE (i.e. 58000) and reducing OI in ATM strike price which is suggesting that big players are betting on the bearish side in this stock as marked in the given picture also.

RBL Bank Option Chain Analysis
RBL Bank Option Chain Analysis

 

Short Build-up is increasing in next month as well as in the far month and put-call ratio continuously decreasing, which suggests that big players are betting on the downside of this stock. As shown in below chart:

Price Movement
RBL Bank Price Movement Data

 

RBL Banl Technical Chart
RBL Banl Technical Chart (Daily)

 

After a sharp downside rally, The stock is trading in a range-bound from the last couple of days.

The stock continuously makes lower high and lower low with the supportive volume on the daily chart which indicates bearishness in this stock.

RSI(Relative Strength Index), 20 days moving average and MACD(Moving Average Conversion and Diversion) also indicate bearishness in this stock. Currently, we are expecting more downside in this stock to 75 levels.

Trading Recommendation

 

Traders can Sell this stock below 102 levels with the stop-loss above 120 level with the targets of 77  and 72 in the coming days. (Lot Size – 1500)

02nd May 2020

RBL Bank Call Update

After giving a chart idea update last Sunday (26th April 2020) RBL Bank stock didn’t break its low of 102 and turn upside from there. Currently trading at around 130+ levels.

Our sell call didn’t initiate so kindly ignore this call. 

Read our this week’s fresh chart idea on other stocks.

 

 

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