City Union Bank: 'Banking on a breakout' - Express Idea

India Infoline News Service | Mumbai |

The stock broke out of the ascending triangle pattern on June 26 on the daily charts.

CMP Rs52, Target Rs60, Upside 13.1%

After hitting lows of Rs40 in December 2011, City Union Bank has bounced back and has been going through a consolidation phase. The stock has been witnessing a consolidation around its 200DMA for almost a year now and is also trading above the same.
 
In this process, the stock has formed an ascending triangle pattern, which is considered to be bullish. City Union Bank broke out of the ascending triangle pattern on June 26 on the daily charts. The flare-up has been accompanied with strong up-tick in traded volumes, adding credence to the breakout.
 
The primary trend for the stock is bullish, as is visible on the chart. Given the established uptrend, the stock is expected to surge post the breach of the ascending triangle pattern.
 
To add to the conviction, in the weekly charts, the stock has broken out of an inverted Head and Shoulders pattern, indicating an end of the consolidation phase. The stock has neatly breached the neckline placed at the Rs50 level.
 
Traditional momentum oscillators are also indicating a positive bias in the counter.
 
Given the above evidence, we recommend a BUY on the stock at current levels for a potential upside target of Rs60. Traders are advised to keep a strict Stop Loss of Rs47.

Daily Candle chart

Source: Amibroker, India Infoline Research


Weekly chart


Source: Amibroker, India Infoline Research
BSE 177.90 [0.85] ([0.48]%)
NSE 177.00 [1.85] ([1.03]%)

***Note: This is a NSE Chart

 

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