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The short-term outlook for the stock of UCO Bank is bullish. The stock rose 2.7 per cent on Wednesday, closing decisively above the 200-DMA. The stock has surged about 10 per cent so far this week. The price action on the daily chart shows that the stock has been moving within a channel since late January. The current leg of upmove that had begun from the May low of ₹31.6 is now gaining momentum.
Support is in the band between ₹40.5 and ₹39.8, which is likely to limit the downside in this stock. A rise to test the channel resistance at ₹45 looks likely in the coming days. Traders with a short-term perspective can go long. Stop-loss can be placed at ₹39.5 for a target of ₹44.5. Revise the stop-loss higher to ₹42.5 as soon as the stock moves up to ₹43.5. The near-term outlook will turn negative if the stock falls below ₹39.5. Such a fall can drag it lower to ₹38.5 or even ₹37 thereafter.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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