Breakout: Bank Hits ‘10% UC’, Breaks Trendline in Style!
The mood of the broader markets changed a bit on the positive side in the second half of the session as Adani Group stocks witnessed a decent recovery from their lows, while some of them also managed to close in the green. As a result, the banking space also attracted investors’ attention which was recently a stay-away sector on account of their exposure to Adani Group.
The Nifty Private Bank index jumped 1.64% to 21,195.25 but one small-cap private bank that remained the showstopper in this space was Karnataka Bank (NS: KBNK ), with a market capitalization of INR 4,312 crores. The share price of Karnataka Bank hit a 10% upper circuit limit of INR 152.05 and comfortably closed at this level as burgeoning demand remained till the session’s close.
Image Description: Daily chart of Karnataka Bank with volume bars at the bottom
Image Source: Investing.com
The stock soared on the back of stellar Q3 FY23 earnings, reporting a 105.32% YoY jump in net profit to INR 300.63 crores. The net profit for the first 9 months now stands at INR 826.15 crores, which is already 62% higher than the entire FY22 profit of INR 507.99 crores. Asset quality has also improved during the reported period, with the GNPAs declining by 8 bps QoQ to 3.28%, compared to 3.36% in the preceding year.
Another reason for investors to lap up Karnataka Bank’s shares is its valuation. The bank is trading at a P/E ratio of a mere 8.49, making it the second-cheapest profitable listed bank on the NSE. The current dividend yield is also impressive, at 2.89% which is the highest among all banks. As per Investing Pro’s proprietary P/E multiple model, the fair value of the stock is 186.45.
These outstanding numbers were clearly cheered by the street, the impact of which can be seen on Karnataka Bank’s share price. In the midst of the rally, the stock also delivered a clear trendline breakout on the daily chart, which has further improved the technical setup and its future trajectory. As the stock has closed above the falling trendline, it can further attempt to scale to the previous swing high of around INR 162. As long as the recent low of INR 131 is intact, the trend remains to be positive.
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looks like going to reach 2007 high in few monthLike 0
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Before few weeks u also stated same for the banknifty breakoutLike 2
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Actual breakout means low at trendline . I dont believe it is actual breakout . Lets see next week what happens. Goodluck all InvestorsLike
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This is not even one third candle form above trendline. Its most risky point to enter as a buy entryLike
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Naked short selling ban could be form this type of trendline breaking canldeLike
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Two more candles will form at the trendline then it will fall againLike
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Stock has still potential to move as the stock price is coming out from long downward trend along with volume. So buy in dip till it remains above slopping trend lineLike
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What's the purpose of this article? Writing about a stock after it already rallied 10%. Should give your fundamental and.technical analysis before it rallies.Like 5
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Are you able to do that? If yes, please publish. In case your results will be correct then we will send recommendation of your name to include in Guineas book of world records.Like 2
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It still has potential to go fuether 15 % before March last friday. Bullish flag Pattern on Monthly chartLike 1
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Requested to predict stocks before based on your analysisLike
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Predictions may be true or may be false. It is called gambling.Like 1
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