Banking stocks: chart check: down nearly 30% from highs! This PSU bank stock is a good buy on the dips bet
Traders holding the stock should stay invested while fresh money can be rolled down to Rs 38, experts suggest, for a target above Rs 40 in the next couple of weeks.
PSU stock with a market capitalization of more than Rs 26,000 crore as of June 6 fell from Rs 54.80 recorded on November 9, 2021 to Rs 38.55 on June 6, 2022, resulting in a drop of more than 29%.
of India took support near Rs 33 in May before rebounding. It rose nearly 7% in a week, which helped the stock break out of its 20-day moving average, suggesting demand at lower levels.
The Relative Strength Index or RSI is trading in the mid-range. RSI is 55.0; a value below 30 is considered oversold and above 70 is considered overbought.
“ Back to recommendation stories
On the price front, the action is trading below 5-DMA but above 10,20,30-DMA as it trades below 50,100 and 200-DMA.
Union Bank has been consolidating for more than three weeks in the range of Rs 35 to 37.50 levels and has formed a basic formation and created an accumulation pattern.
Prices saw a breakout of the consolidation range on May 30 and closed above their trendline resistance.
“The Momentum oscillator saw a strong reversal from the oversold levels and since then it was oscillating between the Rs 35-45 levels. Recently, the RSI also saw a range break above 50 levels with a positive crossover on the daily timeframe,” said Rohan Patil, technical analyst at Bonanza Portfolio.
“Prices also held above the 21-day exponential moving average. The counter is trading near the upper Bollinger Band indicating a possible continuation of the uptrend after the recent consolidation,” did he declare.
Patil recommends traders to initiate a buy position at Rs 38.75, and more on dips near Rs 38 with a stop loss of Rs 36.80 and the first target can be seen at Rs 41.75 and l longer term target at Rs 43 levels.
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts belong to them. These do not represent the views of Economic Times)