IndusInd Bank can fall 11% if its fails to hold support levels, charts show

IndusInd Bank shares slumped over 10 per cent in trades today amid reports of lapses in governance and accounting norms to allegedly 'evergreen' loans running into thousands of crore since the outbreak of Covid-19. READ MORE

Meanwhile, here's a quick check on the charts for the stock following the sudden steep fall.

IndusInd Bank Ltd (INDUSINDBK)
Likely target: Rs 900 (after breaching Rs 1,019)

Downside potential:  11%

The gap-down opening on Monday, November 8, by over 5 per cent, has resulted in a breach of the crucial trendline support at Rs 1,140. The next immediate support for the stock now exists around the 100-day moving average (DMA), coinciding with the horizontal support, at Rs 1,065 level. 

The current downside indicates a possibility of fall towards Rs 1,019, which is the 200-DMA. If shares of IndusInd Bank fail to uphold the 200-DMA, then the weakness may turn into a heavy sell-off and the stock may enter a bearish trend, with downside target of around Rs 900 levels, according to the daily chart.

For the bullish trend to resume, the stock will need to conquer its hurdle at Rs 1,247, which is the 200-weekly moving average (WMA). Till then, the stock may not see any added interest by market participants. While the chart formation suggests an accumulation around Rs 960 levels, the violation of the immediate support of Rs 1,019 may also dismantle the accumulation phase.

The current chart pattern signals a weak trend and market participants are likely to stay on the sidelines to see whether the stock honours the respective support levels. CLICK HERE FOR THE CHART