Axis Bank to create a All Time High – Derivative and Technical Analysis

Axisbank yesterday has traded around its highest level and was able to close comfortably there. But an all-time high is still 1% away, so what should be our approach? Shall we buy or sell this stock? Axis bank analysis will clear this all.

Let us find the answer with technical analysis and by watching derivatives data.

Technical analysis on Axisbank:

Axis bank has tested its previous high today, which was at 652 area. The chart pattern formation is triple top, but this time the momentum is very strong. Supporting the uptrend.

If we see the price action, we see the stock has been moving higher every week for 8 straight weeks. This shows the huge interest of traders who are buying into this stock.

Axis bank has managed to close at 648 yesterday, which is another signal of strong continuing momentum.

Volumes on the daily chart have spiked in last 10 trading sessions. This confirms the movement is supported by volume based buying. Volume, open interest and trend combination can help you to decide your trading strategy.

The trend on the daily chart is clearing an uptrend, as a series of higher tops and higher bottoms is clearly visible here.

Axis bank Analysis on Derivatives data (Futures and Options):

While seeing the derivatives data, especially the options data. We see that the 630, 640 and 650 strike puts have seen tremendous option writing. Meaning, option writers are not seeing the stock below the 650 mark before the expiration of August series.

Also, the 640 strike call has seen the highest unwinding of more than 9 lakh shares from open interest yesterday.

Open interest addition in the put option and unwinding from call option. This shows which direction the major market players are betting on axis bank. Its quite clear that the traders are looking for a decisive up move.

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Let us look at the futures data for August series.

We see a 17% reduction in the open interest yesterday. That’s too high for a stock like Axis bank in a single day. It means that the short sellers on axis bank are now unwinding their positions, as they fear stock can go higher. There is a very high probability that we see axis bank making a fresh all-time high.

Check the same analysis in this video in Hindi:

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