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Investors with short-term perspective can buy the stock of Dena Bank. It is apparent from the charts of the stock that it has been on an intermediate-term downtrend from its January peak of Rs 128. Medium-term trend is also down for the stock from its May peak of Rs 98. However, it found support at its long-term base zone between Rs 40 and Rs 43 in late August. After repeated testing of this support zone, the stock started to trend northwards triggered by positive divergence in daily relative strength index and moving average convergence divergence indicator.
On Thursday, the stock jumped 8 per cent along with the other banking stocks, breaching its 21-day moving average. The accompanying volume was extraordinary. The daily RSI has entered the neutral region from the bearish zone and weekly RSI is recovering from the oversold territory. The daily price rate of change indicator has entered the positive area implying buying interest.
Taking a contrarian stance on the stock, we are bullish on it from a short-term perspective. We anticipate its up move to continue and reach our price target of Rs 49.6 or Rs 50.6 in the approaching trading sessions. Traders with short-term perspective can buy the stock with stop-loss at Rs 46.6 level.
( Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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