Investors with a short-term perspective can consider buying the stock of Bank of India at current levels. The stock gained 7.5 per cent with an above average volume on Wednesday, decisively breaching its 21- as well as 50-day moving averages. Since mid-September 2018, the stock has been on a medium-term sideways consolidation phase in the band between ₹75 and ₹92. Significant support in the ₹74 and ₹76 region cushioned the stock in late October and in early December. After taking support in this band, the stock bounced up strongly.
The short-term outlook is bullish. The daily as well as weekly relative strength indices are moving higher in the neutral region. Interestingly, the daily price rate of change indicator has entered the positive terrain implying buying interest while the weekly indicator is on the brink of entering the positive terrain. The stock has the potential to trend upwards and test the upper boundary in the coming trading sessions. Targets are ₹89.5 and ₹91.5. Traders can buy with a stop-loss at ₹83.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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