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One of the blockbuster IPOs of the recent past was Utkarsh Small Finance Bank Ltd (NS:) Limited which was oversubscribed by more than 100x. But not just that, the stock also hit a 20% upper circuit on day 1 of debut, showing investors’ enthusiasm even after a great listing price.
After a stellar show in the first two days, the stock started consolidating sideways. This neutral trend had been going on for over 2 months. The stock took the shape of a rounding bottom pattern in this consolidation phase as the tug of war between bulls and bears kept the prices from picking up any strong trend.
Image Description: Daily chart of Utkarsh Small Finance Bank with volume bars at the bottom
Image Source: Investing.com
But there was an interesting development that happened in today’s session. The stock eventually broke above the resistance of INR 54 and surged to an all-time high of INR 61.6. Amid some profit booking, the stock closed 16.2% up at INR 59.7, making a strong bullish candle which denotes the resumption of the uptrend.
The volume on Thursday was recorded at over 69.1 million shares which is the highest one-day figure after the first two days of listing. This was also higher by 2,107% over the 10-day average volume of 3.13 million shares. As this breakout is backed by a heavy volume jump, the trend seems strong enough to propel the stock to further higher levels.
The zone of INR 54 – INR 56 seems a good one to participate in the rally for those who have missed the action and are waiting on the sidelines for the next opportunity. This retracement will skew the risk-to-reward ratio in favor of long holders for the potential target of INR 64. An exit level can be maintained below INR 49 as a breach below it will indicate that the stock has again entered the consolidation phase.
X (formerly, Twitter) – aayushxkhanna
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