Investors with a short-term perspective can buy the stock of City Union Bank. From its September 2013 low of ₹38, the stock has been on an intermediate-term uptrend forming higher peaks and troughs. Taking support at ₹46 in late February, the stock continued its uptrend. While doing this, it decisively breached its moving average compression (21-, 50- and 200-day moving averages) at ₹48 in early March.
On Thursday, it jumped 6 per cent with extraordinary volumes breaking through a significant resistance at ₹54. The relative strength index on the daily chart has re-entered the bullish zone from the neutral region. The weekly RSI is featuring in the bullish zone backing the stock’s positive momentum. The stock’s short-term uptrend is intact. Our short-term outlook is bullish. Its current rally can extend and the stock can reach the price target of ₹58 and ₹59.5 in the ensuing trading sessions. Buy it with a stop-loss at ₹54.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)