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If you are planning to invest in equities on this auspicious Diwali day in Muhurat trading, Indian Bank can be a good bet. Investors with a long-term perspective of at least two years can buy the stock of Indian Bank at current levels. The stock has been in a strong uptrend since June 2020. This rally has begun from around a very long-term trendline support level of ₹50. The uptrend has gathered momentum over the last few weeks.
The stock on Indian Bank has a cluster of supports in the ₹180-₹160 region. Any intermediate dips are likely to see fresh buyers coming into the market and limit the downside. Immediate resistance is at ₹234.85 – the 50 per cent Fibonacci retracement level. The inability to breach this hurdle immediately can trigger a short-lived correction to ₹200-₹190. But the overall trend will continue to remain up. An eventual break above ₹234.85 will then open doors for a fresh rise to ₹280-₹300. From a long-term perspective, the stock of Indian Bank can rally to ₹400-₹500. The time frame to see this rally will be a minimum of two years.
Long-term investors can buy the shares of Indian Bank now. Accumulate on dips at ₹190. Keep the stop-loss at ₹130. Trail the stop-loss up to ₹260 when the stock moves above ₹320. Revise the stop-loss further higher to ₹360 when Indian Bank touches ₹420 on the upside. Exit the stock at ₹500.
(Please note that the recommendation is based on technical analysis. There is a risk of loss)
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