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Kotak Mahindra Bank Ltd.
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Kotak Mahindra Bank Ltd.

  • 1,821.006.80 (0.37%)
  • Closed
  • As On: 03 Dec, 2020, 03:59 PM IST
  • Open1,836.00
  • High1,844.00
  • Low1,811.70
  • Prev Close1,814.20
  • Volume44,62,528
  • VWAP(₹)1,827.32
  • Credit-check for corporates in place

    In the past five years, the bank has largely been insulated from the troubles in corporate loans, indicating that the risk of a sudden decline in asset quality is very low and the credit-check system is robust. Covid crisis has impacted the retail loan book of every bank, with Kotak being no exception. The collection efficiency of the bank is high. What needs to be watched is the recovery rate on the individual loan books.
  • Sprucing up subsidiaries

    In some segments like securities trading and asset management, the subsidiaries of the bank are doing well, both in term of revenue and ranking in the industry. But the insurance subsidiary needs to be spruced up. The unlocking of subsidiaries would help the bank in raising resources for any large inorganic expansion plan
  • Network expansion

    The bank currently has 1,600 branches and 2,519 ATMs. The rural and semi urban branches constitute around 34.2 percent of its total branches. There is a scope for expansion, though it appears that the bank is focusing more on digital expansion. That might appear to be in line with times, yet digital space has tough competition from fintech companies.
  • Always willing to take over

    The bank has been successful in taking over medium-sized private bank and integrating well. In the coming years, it is very likely that it might make a bid for other similar sized banks. A merger partly takes care of the issue of high promoter stake.

Key Metrics

  • PE Ratio(x)39.80
  • EPS - TTM(₹)45.75
  • MCap(₹ Cr.)3,60,429
  • MCap Rank2
  • PB Ratio(x)5.23
  • Div Yield(%)0.00
  • Face Value(₹)5.00
  • 52W High(₹)1,948.40
  • 52W Low(₹)1,001.00
  • MCap/Sales7.41
  • Beta(1 Month)1.20
  • BV/Share(₹)339.27

Returns

  • 1 Day0.37%
  • 1 Month14.27%
  • 3 Months30.38%
  • 1 Year10.58%
  • 3 Years81.17%
  • 5 Years169.86%

Financials

    • Profit Per Branch - Uptrend

      Net profit per branch has been continuously increasing over the last 3 years with a growth of 14.6% last year. (Source: Standalone Financials)
    • Quarterly Revenue Growth Comparison

      Company reported total income growth on both quarterly & yearly basis. Total income for Sep 30, 2020 quarter was Rs 13591.41 cr which is an increase of 10.29% QoQ and 8.36% YoY. (Source: Consolidated Financials)
    Sep 2020Jun 2020Mar 2020Dec 2019Sep 2019
    Total Income13,591.4112,323.1512,084.7113,542.4312,542.99
    Total Income Growth (%)10.291.97-10.767.973.41
    Provisions & Contingencies473.221,119.331,262.19472.59473.10
    Provisions & Contingencies Growth (%)-57.72-11.32167.08-0.1135.09
    Profit after Tax (PAT)2,946.621,852.591,905.182,348.722,407.25
    PAT Growth (%)59.05-2.76-18.88-2.4324.59
    Gross NPA (%)2.552.672.162.332.17
    Net NPA (%)0.700.890.700.870.82
    Net Profit Margin (%)21.6815.0315.7717.3419.19
    Basic EPS (₹)14.899.579.7112.2912.61
    Sep 2020Jun 2020Mar 2020Dec 2019Sep 2019
    Total Income8,288.087,685.408,294.078,077.037,986.01
    Total Income Growth (%)7.84-7.342.691.140.52
    Provisions & Contingencies368.59962.011,047.47444.00407.93
    Provisions & Contingencies Growth (%)-61.69-8.16135.928.8428.78
    Profit after Tax (PAT)2,184.481,244.451,266.601,595.901,724.48
    PAT Growth (%)75.54-1.75-20.63-7.4626.78
    Gross NPA (%)2.552.702.252.462.32
    Net NPA (%)0.640.870.710.890.85
    Net Profit Margin (%)26.3616.1915.2719.7621.59
    Basic EPS (₹)11.046.436.378.359.03
    FY 2020FY 2019FY 2018FY 2017FY 2016
    Total Income50,365.7445,979.1138,813.3133,983.7728,032.36
    Total Income Growth (%)9.5418.4614.2121.2330.56
    Provisions & Contingencies5,372.824,501.394,035.833,331.772,584.19
    Provisions & Contingencies Growth (%)19.3611.5421.1328.9352.85
    Profit after Tax (PAT)8,593.367,204.136,200.974,941.333,458.85
    PAT Growth (%)20.8915.8224.1944.2711.94
    Net Interest Margin (%)3.963.733.743.933.85
    Net Profit Margin (%)25.6724.0624.6722.1316.95
    Basic EPS (₹)44.7337.7832.7026.8918.91
    FY 2020FY 2019FY 2018FY 2017FY 2016
    Total Income32,301.7228,547.2323,800.7021,176.0918,996.42
    Total Income Growth (%)13.1519.9412.3911.4761.69
    Provisions & Contingencies4,073.663,482.853,073.872,573.311,951.31
    Provisions & Contingencies Growth (%)16.9613.3119.4531.8872.46
    Profit after Tax (PAT)5,947.184,865.334,084.303,411.502,089.78
    PAT Growth (%)22.2419.1219.7263.2511.99
    Net Interest Margin (%)3.743.603.593.783.58
    Net Profit Margin (%)22.0820.3220.6819.2712.75
    Basic EPS (₹)30.8825.5221.5418.5711.42

    All figures in Rs Cr, unless mentioned otherwise

  • AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Advances2,49,878.962,43,461.992,05,997.321,67,124.911,44,792.82
    Advances Growth (%)2.6418.1923.2615.4263.36
    Deposits2,60,400.212,24,824.261,91,235.801,55,540.001,35,948.76
    Deposits Growth (%)15.8217.5622.9514.4186.63
    Total Equity67,134.1258,279.7350,486.0738,965.2733,756.24
    Total Equity Growth (%)15.1915.4429.5715.4350.10
    Gross NPA (%)-----
    Net NPA (%)-----
    Capital Adequacy Ratios (%)-----
    Contingent Liabilities1,90,159.092,17,847.152,09,757.541,96,172.072,34,097.80
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Advances2,19,748.192,05,694.811,69,717.921,36,082.131,18,665.30
    Advances Growth (%)6.8321.2024.7214.6879.36
    Deposits2,62,820.522,25,880.361,92,643.271,57,425.861,38,643.02
    Deposits Growth (%)16.3517.2522.3713.5585.20
    Total Equity48,518.1742,400.4537,483.8227,617.9423,962.47
    Total Equity Growth (%)14.4313.1235.7215.2569.42
    Gross NPA (%)2.252.142.222.592.40
    Net NPA (%)0.710.750.981.261.06
    Capital Adequacy Ratios (%)17.8917.4518.2216.7716.34
    Contingent Liabilities1,87,277.362,12,082.272,05,104.841,93,067.542,31,996.22

    All figures in Rs Cr, unless mentioned otherwise

    • Increase in Cash from Investing

      Company has used Rs 13198.87 cr for investing activities which is an YoY increase of 290.2%. (Source: Consolidated Financials)
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Net Cash flow from Operating Activities46,618.831,822.38-10,392.4113,222.505,024.58
    Net Cash used in Investing Activities-13,198.87-3,382.56-5,608.25-5,268.09-8,662.39
    Net Cash flow from Financing Activities-735.008,364.5914,679.406,055.262,024.41
    Net Cash Flow32,815.396,863.83-1,187.9213,989.14-1,613.40
    Closing Cash & Cash Equivalent64,079.8531,264.4624,400.6325,588.5511,599.41
    Closing Cash & Cash Equivalent Growth (%)104.9628.13-4.64120.6068.02
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Net Cash flow from Operating Activities30,159.43-3,387.72-10,274.9214,411.926,133.72
    Net Cash used in Investing Activities-7,454.06798.11-2,515.50-2,971.84-6,363.01
    Net Cash flow from Financing Activities5,882.917,633.079,837.22256.52-1,463.91
    Net Cash Flow28,616.765,055.43-2,951.9011,692.29-1,693.19
    Closing Cash & Cash Equivalent53,292.3024,675.5419,620.1122,572.0110,879.72
    Closing Cash & Cash Equivalent Growth (%)115.9725.77-13.08107.4773.73

    All figures in Rs Cr, unless mentioned otherwise

  • AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Return on Equity (%)12.8912.4612.2812.8310.36
    Return on Assets (%)1.931.821.831.781.43
    Cost to Income (%)51.3451.4852.0451.7248.08
    Interest income to Earning assets (%)7.557.577.448.088.47
    Interest Expense to Earning assets (%)3.583.843.694.144.61
    Price to Earnings (x)28.9035.4632.2632.5736.23
    Price to Book (x)3.724.413.964.173.74
    Price to Sales (x)7.418.527.957.196.12
    Operating Profit Margin (%)-24.74-29.81-29.98-30.05-20.58
    AnnualFY 2020FY 2019FY 2018FY 2017FY 2016
    Return on Equity (%)12.2511.4710.8912.358.72
    Return on Assets (%)1.651.551.541.581.08
    Cost to Income (%)40.0138.5239.9138.6839.07
    Interest income to Earning assets (%)7.477.667.458.248.52
    Interest Expense to Earning assets (%)3.724.063.854.464.93
    Price to Earnings (x)41.8452.6349.0247.1759.88
    Price to Book (x)5.116.015.335.815.21
    Price to Sales (x)9.2110.6510.129.077.62
    Operating Profit Margin (%)2.131.090.16-0.37-3.18

Technicals

  • 10 Day EMA Crossover

    Bearish signal on daily chart

    Appeared on: 2 Dec 2020

    10D EMA: 1850.69

    Last Signal 15 Oct 2020 (Loss -0.08%)

    Average price decline of -1.97% within 7 days of Bearish signal in last 5 years

    14 Day EMA Crossover

    Bearish signal on daily chart

    Appeared on: 2 Dec 2020

    14D EMA: 1828.00

    Last Signal 15 Oct 2020 (Loss -0.08%)

    Average price decline of -2.30% within 7 days of Bearish signal in last 5 years

    5 Day EMA Crossover

    Bearish signal on daily chart

    Appeared on: 1 Dec 2020

    5D EMA: 1883.72

    Last Signal 25 Nov 2020 (Loss -0.67%)

    Average price decline of -1.96% within 7 days of Bearish signal in last 5 years

  • 47%
    Positive Movement
    since 1st Jan 2005
    on basis
    53%
    Negative Movement
    since 1st Jan 2005
    on basis
    Exclude

    Global Meltdown1st Jan 2008 to 10th Nov 2008

    Covid Crisis1st Feb 2020 to 31st Mar 2020

  • R11839.43Pivot

    1825.57

    S11807.13
    R21857.87S21793.27
    R31890.17S31760.97
  • 5 Days14 Days28 Days
    58.5856.6652.65

Peers

    • CHART
    • TABLE
    • 1D
    • 1W
    • 1M
    • 3M
    • 6M
    • 1Y
    • 5Y
  • NAMEP/E (x)P/B (x)ROE %ROA %Rev CAGR [3Yr]OPMNPM
    Kotak Bank39.803.7212.891.9313.86-24.7425.67
    ICICI Bank23.871.757.980.699.62-63.3211.27
    Axis Bank51.961.242.140.1911.48-22.692.90
    IndusInd Bank24.230.7112.941.4524.10-8.6615.48
    Bandhan Bank22.312.1619.893.2941.7513.5427.77
    Add More
    Annual Ratios (%)

    Choose from Peers

    • YES Bank
    • IDFC First Bank
    • City Union Bank
    • Federal Bank
    • RBL Bank

    Choose from Stocks

    Shareholding Patterns

    • Category30 Jun 202031 Mar 202031 Dec 201930 Sep 2019
      Promoters26.0729.9229.9629.97
      Pledge0.000.000.000.00
      FII42.1539.1739.7540.15
      DII15.2712.6512.3812.27
      Mutual Funds9.849.008.798.79
      Others16.5118.2617.9117.61
    • CategoryNo. of SharesPercentage% Change QoQ
      Promoters51,58,63,96426.07 %-3.85
      Pledge00.00 %0.00
      FII83,39,87,33842.15 %2.98
      DII30,23,27,30615.27 %2.62
      MF19,48,10,1639.84 %0.84
      Others32,66,25,76916.51 %-1.75

    Mutual Funds Ownership

    MF Ownership as on 31 October 2020

    • Equity: Large Cap
      • 3,339.89

        Amount Invested (in Cr.)

      • 4.51%

        % of AUM

      • -4.54

        % Change (MoM basis)

      • 1,762.69

        Amount Invested (in Cr.)

      • 7.79%

        % of AUM

      • 5.03

        % Change (MoM basis)

    • Equity: Large Cap
      • 1,434.36

        Amount Invested (in Cr.)

      • 4.67%

        % of AUM

      • -2.77

        % Change (MoM basis)

    Futures & Options

      • Expiry Month
      DatePrice

      27-09-2020Current

      1,822.756.45 (0.36%)

      1,821.85
      Open
      1,842.25
      High
      1,810.00
      Low
      1,816.30
      Prev Close
      14,058
      Contracts Traded
      1,02,606.53
      Turnover (₹ Lakhs)
      • Type
      • Expiry Month
      • Strike Price
      DatePrice

      27-09-2020Current

      0.00-370.60 (-100.00%)

      0.00
      Open
      0.00
      High
      0.00
      Low
      370.60
      Close
      0
      Contracts Traded
      0.00
      Turnover (₹ Lakhs)

    Corporate Actions

    • Board Meeting

      Quarterly Results

      Oct 19, 2020

      Board Meeting

      Quarterly Results

      Jul 22, 2020

      General Meeting

      -

      Jul 10, 2020

    • Announced onMeeting on
      Oct 19, 2020Oct 26, 2020
      Quarterly Results
      Jul 22, 2020Jul 27, 2020
      Quarterly Results
      May 07, 2020May 13, 2020
      Audited Results
      Apr 20, 2020Apr 22, 2020
      Others
      Mar 09, 2020Mar 17, 2020
      Dividend on Preference Shares
    • Announced onEx-DateDividend%
      May 02, 2017Jul 12, 201712%
      Apr 30, 2018Jul 11, 201814%
      Mar 08, 2019Mar 20, 20198%
      Apr 30, 2019Jul 12, 201916%
      Mar 09, 2020Mar 19, 20200%
    • Announced onEx-Date
      May 05, 2015Jul 08, 2015
      Bonus Ratio: 1 share(s) for every 1 shares held
      Jun 07, 2005Aug 25, 2005
      Bonus Ratio: 3 share(s) for every 2 shares held
      May 25, 2004Aug 25, 2004
      Bonus Ratio: 1 share(s) for every 1 shares held
      Aug 10, 1995Dec 01, 1994
      Bonus Ratio: 1 share(s) for every 2 shares held
      Jan 03, 1994Nov 25, 1994
      Bonus Ratio: 1 share(s) for every 1 shares held
    • Announced onEx-Date
      May 11, 2010Sep 13, 2010
      Split: Old FV10.0| New FV:5.0
    • Announced onEx-Date
      Jan 21, 2000Jan 31, 2000
      Rights ratio: 1 share for every 4 held at a price of Rs 100.0
      Sep 30, 1993Jan 07, 1993
      Rights ratio: 1 share for every 1 held at a price of Rs 25.0
    • Announced onMeeting on
      Jul 10, 2020Aug 18, 2020
      -
      Apr 24, 2020May 25, 2020
      -
      Jun 21, 2019Jul 22, 2019
      Book closure from Jul 16, 2019 to Jul 22, 2019
      Jun 21, 2019-
      Book closure from Jul 16, 2019 to Jul 22, 2019
      Jun 21, 2019-
      Book closure from Jul 16, 2019 to Jul 22, 2019

    About

    Kotak Mahindra Bank Ltd., incorporated in the year 1985, is a banking company (having a market cap of Rs 360340.28 Crore).

    Kotak Mahindra Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills which contributed Rs 20999.24 Crore to Sales Value (77.97 % of Total Sales), Income From Investment which contributed Rs 5257.25 Crore to Sales Value (19.52 % of Total Sales), Interest On Balances with RBI and Other Inter-Bank Funds which contributed Rs 381.24 Crore to Sales Value (1.41 % of Total Sales) and Interest which contributed Rs 291.89 Crore to Sales Value (1.08 % of Total Sales)for the year ending 31-Mar-2020.

    The Bank has reported a Gross Non Performing Assets (Gross NPAs) of Rs 6055.01 Crore (.00 % of total assets) and Net Non Performing Assets (Net NPAs) of Rs 1636.82 Crore (.00% of total assets).

    For the quarter ended 30-09-2020, the company has reported a Consolidated Interest Income of Rs 5473.08 Crore, down -5.20 % from last quarter Interest Income of Rs 5773.27 Crore and down -12.91 % from last year same quarter Interest Income of Rs 6284.31 Crore. The bank has reported net profit after tax of Rs 2933.46 Crore in latest quarter.

    The bank’s top management includes Mr.C Jayaram, Mrs.Farida Khambata, Mr.Uday Shankar, Mr.Uday Kotak, Mr.Uday Khanna, Mr.Prakash Apte, Mr.K V S Manian, Mr.Gaurang Shah, Mr.Dipak Gupta, Prof.S Mahendra Dev. It has Walker Chandiok & Co. LLP as its auditoRs As on 30-09-2020, the company has a total of 1,979,207,809 shares outstanding.

    About Kotak Bank

    Kotak Mahindra Bank Ltd., incorporated in the year 1985, is a banking company (having a market cap of Rs 360340.28 Crore). Show More

    Key Indices Listed On

    Nifty 50, S&P BSE Sensex, Nifty Bank, Nifty 100, Nifty 200

    Address

    27 BKC,C-27, G-Block,Mumbai, Maharashtra - 400051

    Executive Leadership

    BC

    Bina Chandarana

    Sr. Exe.Vice President & Co. Secretary
    BC

    Bina Chandarana

    Secretary
    CJ

    C Jayaram

    Director
    DG

    Dipak Gupta

    Joint Managing Director
    Show More

    Auditors

    Walker Chandiok & Co. LLP
    S R Batliboi & Co. LLP

    Kotak Bank Share Price Update

    Kotak Mahindra Bank Ltd. share price moved up by 0.37% from its previous close of Rs 1,814.20. Kotak Mahindra Bank Ltd. stock last traded price is 1,821.00

    Share PriceValue
    Today/Current/Last1,821.00
    Previous Day1,814.20

    DATA SOURCES: TickerPlant (for live BSE/NSE quotes service) and Dion Global Solutions Ltd. (for corporate data, historical price & volume, F&O data). Sensex & BSE Quotes and Nifty & NSE Quotes are real-time and licensed from BSE and NSE respectively. All timestamps are reflected in IST (Indian Standard Time).

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    Markets Data

    *

    Key Metrics

    • This is a ratio arrived at by dividing the current market price of a stock by its latest (annual or annualized) earnings per share. Here we have taken the TTM (trailing twelve months) adjusted earnings per share.

    • Earnings per share (TTM) tells the profit after tax earned on a per share basis by a stock over the last twelve months or four quarters.

    • MCap or Market capitalization of a stock is calculated by multiplying the total number of shares outstanding of that particular stock with its current market price.

    • This is the ranking of a company within its sector based on MCap or Market capitalization. Higher the market capitalization of a company, higher the rank it is assigned.

    • Price to Book represents the ratio of current market price of a stock to its book value per share. The book value itself is arrived at by dividing the net worth of a company by the total number of shares outstanding of the company at that time.

    • Dividend Yield calculates the amount of full year dividend declared by a company as a percentage of the current market price of a stock. All other things being equal, higher the dividend yield of the stock, the better it is for investors.

    • Face value of a stock is the value ascribed to the stock as per the balance sheet of the company. The dividend declared by a company is usually declared as a percentage of face value.

    • Beta (β) is a measure of systematic risk. It describes the responsiveness of a stock to fluctuations in the market. Beta coefficient of more than 1 denotes that a security is more volatile than its benchmark and less than 0 signifies that security return is not correlated to market movement.

    • Volume Weighted Average Price represents the average price of a security over a particular time period (example one trading day) weighted by the volume traded at each price point.

    • This represents the 52 week high and low price of the security. It is also the 1 year high and low of the security. This represents the highest and lowest price touched by the security during the past 52 weeks or 1 year including today.

    • Book value represents the value arrived at by subtracting the total liabilities from the total assets of the company. On dividing this value with the total number of shares outstanding for the company, we can arrive at book value per share. Book value is also known as Net Asset Value of a company.

    • This is a ratio of market capitalisation of a company’s stock to its annual sales. The market capitalization here is taken for the fully paid-up equity share of the company.

    Technicals

    • Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

      Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

    • Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

      Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

    • Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

      Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

    • Pivot points are indicative support and resistance levels which are calculated on basis of previous day’s high, low and closing prices. Pivot level for Monday’s trade would be based on Friday’s prices and Monday’s, high, low and close price would go into calculation of pivot levels for Tuesday’s trading session.

      There are two underlying assumptions in pivot points. First, the specific price level indicated by R1, R2 and R3 may act as a barrier or resistance in an uptrend. So, if a stock moves up above these pivots levels, the uptrend gets confirmed. Second these specific price levels may see an increased activity, hence may be used as levels to book profit by traders with a long positions. For traders with short position, these points are often helpful in determining what should be the stop loss for a trade.

      Similarly, in case of support levels as indicated by S1, S2 and S3, they may act as price level where a stock might get a breather when it is slipping southward. In case these supports levels are broken it is a confirmation of a down trend. The stock may also see increased activity close to pivot levels. They may be used by trader may use them to put stop loss for a long trade. If a trader has short position, the pivot level may help in determine a level, where profit may be booked.

      Like any other technical indicator, pivots levels cannot and should not be used as single factor while taking a trading decision. They should be combined with other technical indicators. It could be short term moving averages, stochastic, moving average convergence divergence (MACD) or overbought level as indicated by relative strength index (RSI). For example, if a breakdown of support level (S1, S2 or S3) is accompanied with stock price also moving below its short term moving average or stochastic on daily charts giving a sell signal, it would add to weightage to the decision of taking a short trade.