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The near-term outlook for the stock of Canara Bank is positive. The stock surged 6.6 per cent on Tuesday accompanied by strong volume. Prior to this rise, the stock was hovering above the 21- and 100-DMA support levels at around ₹189. After Tuesday’s strong rally, the stock is now well placed above these two moving averages. Also, this rise has taken the stock decisively above the psychological ₹200-mark.
Immediate supports are at ₹200 and ₹197. As long as the stock trades above these supports, a rise to ₹220 and ₹222 is possible in the near term. If the stock manages to surpass ₹222, then the rally can extend to test the 200-DMA resistance at ₹232. Traders with a short-term perspective can go long. Stop-loss can be placed at ₹196 for a target of ₹220. Revise the stop-loss higher to ₹210 as soon as the stock moves to ₹215. The bullish outlook will get negated if the stock declines and records a strong close below ₹189.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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