Today's Pick

Indian Overseas Bank (Rs 132.7): Buy

Yoganand D. BL Research Bureau | Updated on February 28, 2011 Published on February 28, 2011


We recommend a buy in the stock of Indian Overseas Bank from a short-term perspective. After peaking out in November 2010 at Rs 175, the stock declined until it found twin support around Rs 120 in February 2011, its significant long-term support level and uptrend-line. Moreover, the stock's 61 per cent fibonacci retracement level of its prior uptrend from February 2010 low to November peak also coincides with this support level.

Triggered by positive divergence displayed in the daily moving average convergence divergence indicator, the stock bounced up. Since early February it has been on a short-term uptrend. We notice good volumes during the advance days of current rally.

On February 28, the stock jumped 4.4 per cent breaching its 200-day moving average conclusively. Daily indicators are heading towards the bullish zone signalling upward momentum. We are bullish on the stock from a short-term perspective. We expect it to rally further until it hits our price target of Rs 137 or Rs 141 in the days ahead. Short-term traders can consider buying the stock with a stop-loss at Rs 129.

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Published on February 28, 2011
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