Canara Bank, part of the PSU banking segment, rallied more than 20% in the last 3 months to hit a fresh record high in December 2023 and the chart pattern suggests that the rally may not be over yet.
Short-term traders can look to buy the stock for a target of Rs 432 in the next 3-4 weeks, suggest experts.
The PSU stock hit a 52-week high of Rs 419 on 1st December 2023. It rose from Rs 328 as on 1st September to Rs 410 recorded on 1st December which translates into an upside of about 25% in the last 3 months.
The stock rose more than 5% in a week, and over 7% in a month.
The PSU stock bounced back after taking support above 380 levels in the last week of November.
The momentum helped the stock to climb above the swing high of Rs 411 recorded on 15th November.
In terms of price action, the stock is trading well above most of the crucial short- and long-term moving averages such as 5,10,30,50,100 and 200-DMA on the daily charts.
The daily Relative Strength Index (RSI) is placed at 67.1. RSI below 30 is oversold and above 70 I considered overbought, Trendlyne data showed.
The daily MACD is above its center and signal Line, this is a bullish indicator.
The stock has been forming higher top higher bottom formation for the last 4 months on the monthly scale which is a positive sign for the bulls.
“Canara Bank is forming higher lows on the monthly scale which suggests that the base of the stock is shifting higher. On the daily scale, the stock has retested the previous breakout zone and negated the formation of lower highs after eight sessions,” Arpit Beriwal, Analyst, Equity Derivatives & Technicals, MOFSL, said.
“It has also formed a bullish candle on the daily scale and the stock is holding well above its 20-DEMA.