Quant Pick - Federal Bank - ICICI Securities

Recommendation

Buy Federal Bank in range of Rs. 49-51
Target: Rs. 61
Stop Loss: Rs. 44.5
Time frame: Three months

Derivatives & Quantitative Outlook

The banking space has underperformed in the market up move. Most stocks remained largely range bound in the last five months. However, heavily beaten down stocks from the sector have shown relative outperformance in the recent up move. Stocks like Federal Bank have seen significant addition in open interest while finding support near its major Put base. We believe the stock is well placed to test its Call base with intermediate support level of Rs. 50.

The open interest in the stock increased sharply in August. During that time, OI in the stock was at a multi-year high. However, despite the healthy correction, the stock has not seen a major liquidation in OI. In the last two months, the current OI is still high. We believe these long positions have been rolled in the stock. We expect the stock to see fresh upsides in the coming sessions as the Bank Nifty is on the verge of a fresh breakout.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_QuantPick_FederalBank_Nov20.pdf

Shares of FEDERAL BANK LTD. was last trading in BSE at Rs.53.5 as compared to the previous close of Rs. 51.7. The total number of shares traded during the day was 3424174 in over 7690 trades.

The stock hit an intraday high of Rs. 53.7 and intraday low of 51.9. The net turnover during the day was Rs. 180832726.

Source : Equity Bulls

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