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The stock of Bank of India tumbled 5 per cent with good volume on Monday, reinforcing its bearish momentum. Investors with a short-term perspective can sell the stock at current levels.
The stock’s medium-term uptrend came to an end at the key resistance at ₹244 in early January. Subsequently, the stock changed direction, triggered by negative divergence in the daily moving average convergence divergence indicator and started to plunge.
In late January, the stock emphatically breached a moving average compression (21-, 50-and 200-day moving averages) at around ₹227. Besides, the stock recently broke a key support at ₹200.
The indicators on the daily chart are featuring in the bearish zone implying downward momentum. The indicators on the weekly chart have entered the bearish zone from the neutral region strengthening the stock’s downtrend.
The short-term outlook is bearish for BOI. Its decline can extend and reach the price target of ₹174 and then to ₹171 in the ensuing trading sessions. Sell the stock with a stop-loss at ₹186.
NOTE: The recommendations are based on technical analysis. There is a risk of loss in trading.
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