RBL Bank shares trading above key exponential moving averages; is Rs 300 the next target price?

Shares of RBL Bank Ltd are trading above their key exponential moving averages (EMAs), including the 20-day, 50-day, 100-day and 200-day EMAs. The EMAs signal bullish momentum for the stock, which has already doubled in the last one year. In fact, the stock has risen 104% from its 52-week low of Rs 118.40 hit on October 6 last year. The banking stock closed at Rs 247.50 on October 6 this year. It also hit a 52 week high of Rs 256.60 on October 5, 2023.  

Analysts are mostly positive on the prospects of the stock and expect it to reach Rs 300 in the near term.  

Vaishali Parekh, AVP- Technical Research & Analysis at Prabhudas Lilladher said, “The stock has given a decent rise in the last 4 months and currently has resisted near the peak level of Rs 256 zone and has slipped to some extent with near term support lying near Rs 228 levels of the significant 50EMA zone. The overall trend is still maintained positive and only a decisive breach below the Rs 228 levels shall weaken the bias and expect for further slide. At the same time, on the upside a decisive breach above Rs 256 shall trigger for a breakout for next higher targets of Rs 270 and Rs 295 levels.” 

Aditya Gaggar, Director of Progressive Shares said, "After consolidating for over two years, the stock has given a breakout from the continuation pattern known as the Rounding Bottom Formation in the higher timeframe while in the lower timeframe as well, a continuation pattern breakout was spotted i.e. Symmetrical Triangle Breakout. Indicators support the price behaviour. As per the Rounding Bottom Formation, the target is Rs 400 while the short-term target is Rs 280 (as per the Symmetrical Triangle Formation)."

Deven Mehata, Equity Research Analyst at Choice Broking expects the banking stock to reach a target of Rs 300 in the near term. 

“On the weekly chart, the price has broken out of a rounding pattern after a retest, reaching a high of  Rs 256.70. Currently, the stock is trading within a range of   Rs 225-260. If the price breaks out above Rs 260, the next resistance level exists at Rs 295. Furthermore, RBL Bank is currently trading above critical Exponential Moving Averages (EMAs), including the 20-day, 50-day, 100-day, and 200-day EMAs, which reinforces its bullish momentum and suggests potential for further upward price movement. 

The Relative Strength Index (RSI) is currently at 66.25 and trending upwards, indicating a growing buying momentum. Additionally, the Stochastic Relative Strength Index has recently experienced a positive crossover from the oversold region. This combination of technical indicators suggests that RBL Bank may have the potential to reach a target price of Rs 300 in the near term,” said Mehata.  

“It is advisable to consider buying on dips near the Rs 225 level with next targets set at Rs 280-300 in the short run. This strategy aligns with the technical analysis and prevailing market conditions, potentially presenting an attractive opportunity for traders and investors,” added Mehata. 

Abhijeet from Tips2trades said, "RBL Bank has been bearish on the Daily charts with strong resistance at Rs 257. A daily close below support of Rs 243 could lead to target of Rs 218 in the near term." 

In the previous session, the RBL Bank stock ended 2.21% higher at Rs  247.50 against the previous close of Rs 242.15 on BSE.  

Market cap of the bank climbed to Rs 14,883 crore on BSE.   

Total 3.13 lakh shares of the firm changed hands amounting to a turnover of Rs 7.73 crore. Market cap of the bank fell to Rs 14,883 crore on Friday. The stock has a beta of 1.7, indicating high volatility in a year.    

In terms of technicals, the relative strength index (RSI) of RBL Bank stands at 58.5, signaling it's neither trading in the overbought nor in the oversold territory. RBL Bank shares are trading higher than the 10 day, 50 day, 100 day, 150 day and 200 day moving averages.             

The lender logged a 13 percent rise in deposits to Rs 89,774 crore on a year-on-year (YoY) basis. The lender reported total deposits at Rs 89,774 crore for the quarter ended September FY24, up 13 percent YoY and 5 percent QoQ, while gross advances rose 21 percent YoY & 5 percent QoQ to Rs 78,186 crore, respectively.  

CASA for the September quarter rose 12 percent YoY & 0.5 percent QoQ to Rs 32,075 crore. Retail advances grew 34 percent YoY and 8 percent sequentially, while wholesale advances grew 7 percent YoY and were flat sequentially for the quarter ended September 30, 2023.  

The private sector lender reported a 43.2 per cent rise in net profit to Rs 288 crore for the first quarter ended June 2023, helped by lower provisions and higher interest income. Profit after Tax (PAT) also rose by 30 per cent on a quarter-on-quarter basis.   

Operating profit climbed 22 per cent year-on-year and 9 per cent quarter-on-quarter to Rs 647 crore. The Mumbai-headquartered bank's total revenue increased 18 per cent year-on-year and 2 per cent quarter-on-quarter to Rs 1,932 crore.  

 

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.