PSU Stocks: Chart Check: After delivering 60% returns in a year, this PSU stock could hit fresh 52-week high in 6 months – Blue Barrows

Indian Bank, part of the PSU banking space, has rallied more than 60 per cent in a year and recent price action suggests that the momentum is intact which could take the stock to fresh record highs in the next 6-12 months, suggest experts.

The PSU bank rose from Rs 121.50 recorded on 30 August 2021 to Rs 194 as on 30 August 2022 which translates into an upside of over 60 per cent in a year.

Short-term traders can look to buy the stock now or on dips towards Rs 180-150 levels, for a possible target towards Rs 350-400, suggest experts.

Chart Check

The stock has been in an uptrend so far in 2022. It rose more than 9 per cent in a week, and over 10 per cent in a month. The stock rose more than 39 per cent so far in 2022.

On the weekly chart, the stock broke out from a falling trendline resistance connecting from August 2018 high which was closer to Rs 400 to the August 2022 high above Rs 190 levels.

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The relative strength index (RSI) is at 69.2. RSI below 30 is considered oversold and above 70 is considered overbought, Trendlyne data showed. MACD is above its center and signal line, this is a bullish indicator.

On the price front, the stock is trading above most of the crucial short and long term moving averages of 5,10,30,50,100 and 200-DMA which is a positive sign for the bulls.

The stock price started its downfall from Rs 428 (November 2017) making lower tops and lower bottoms along with trading below averages. It started its upmove after hitting a low of Rs 41.70 back in March 2020.

“After bouncing off from March 2020 lows, the supertrend indicator turned positive, and the stock made a high of Rs 195 in October 2021. The firm uptrend since March 20 suggests a strong Bull Grip in the stock,” Bharat Gala, President – Technical Research, Ventura Securities, said.

“After hitting a high, the stock entered a consolidation phase, but continuously making higher bottoms gave a trend line (connecting August 2018 and August 2022) breakout,” he said.

“Recently, the stock formed a positive candle making a high of Rs 197 above the previous recent high of Rs 195, after continuously trading above the trend line for the past few weeks,” he added.

The Aroon up/down, KST and ROC indicator suggest a possibility of a strong upmove.

‘Aroon’ is used to measure the direction of market trends and spot potential reversals, know sure thing or KST is a momentum oscillator that is used to identify trade signals for traders, and rate of change is a momentum indicator over a given period of time.

“The possible targets are Rs 350-400 in the next 6-12 months. If the stock price corrects downwards the buy levels are (Rs 181-171)- Rs 164-(Rs 155-151). A stop loss to be observed in the trade is Rs 135,” recommends Gala.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)