The Hindu Business Line : Today's Pick: Bank of India (Rs 259.10)

Business Daily from THE HINDU group of publications Thursday, Sep 20, 2007 ePaper

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Today's Pick: Bank of India (Rs 259.10)

We recommend a buy in Bank of India at current price. The stock has been in uptrend since the July 2006 low of Rs 80. However, after making an all-time high at Rs 276 in July, the stock has been declining. This short-term downtrend got arrested around Rs 220, which coincides with the 38.2 per cent fibonacci retracement level of the previous medium term uptrend. The stock broke out on Wednesday after a protracted consolidation above its 21-day moving average. It has also penetrated the downtrend line originating from the previous peak.

The daily momentum indicators have entered the bullish zone. The immediate support for the stock is at Rs 250 and the subsequent one is at Rs 240. Investors with short-term horizon can buy at the current price and stop at Rs 250. Since the near term trend is positive, we expect the stock to move up to its all-time high at Rs 276 soon. Profit can be booked if the stock fails to make a new all-time high. Long-term investors can also buy the stock with a deeper stop loss at Rs 220.

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