Rs 1,290 is an excellent level to buy Axis Bank: Devangshu Datta

Axis Bank has opened lower today – not surprising given the stake sale. Intra-day, it seems as though the price is likely to range between Rs 1,325–1,355. Breakouts from the trading range could mean an intra-day surge till Rs 1,380–1,390 or a fall till Rs 1,290–1,300. (bottom-end of the price band for the SUUTI stake sale)

However, there's slight backwardation in the futures segment, which indicates that a fall is a little more likely. The market has opened strong in general and the Bank Nifty is quite strong in particular.

Form a medium-to-long term perspective, the Axis Bank stock looks fairly bullish. There is resistance at Rs 1,400–1,450. If that is broken, targets of Rs 1,500–1,600 (new 52-week highs) are possible on the upside.

On the downside, there's also a lot of support between Rs 1,250–1,275 and at Rs 1,300. The stock is already quite liquid. The stake sale will increase liquidity but not by a great extent since the buyers will be institutional.

If the stock does fall till the lower end of the price band (Rs 1,290-1,300), it will be an excellent buy. Even at the top end (Rs 1,345-1,355) it is a reasonable buy.

Long-term investors who already hold the stock should hang on to it or increase their holding, perhaps keeping a deep stop loss at around Rs 1,215-1,230.

Traders / investors with a short-term perspective could also buy the stock, with a stop loss at Rs 1,275–1,290.

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The author is a Delhi-based independent technical analyst