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The outlook for the stock of City Union Bank is bearish. The stock has been falling consistently since November 8. It has tumbled about 9 per cent since then. There is a head and shoulder reversal pattern visible on the chart. The neckline resistance of this pattern is at ₹166. Immediate support is at ₹155.
Any bounce from this support is likely to be capped at ₹166. Rallies to ₹166 can find fresh sellers coming into the market. The chances are high for the stock to break below ₹155 eventually. Such a break can drag the stock lower to ₹150 and ₹145 eventually in the coming weeks. Traders can go short at current levels. Accumulate shorts at ₹163. Stop-loss can be placed at ₹168. Trail the stop-loss down to ₹157 as soon as the stock touches ₹155. Move the stop-loss further down to ₹152 as soon as the stock falls to ₹148. Book profits at ₹146. The bearish outlook will get negated if the stock breaks above ₹166 decisively. Such a break will then pave the way for a fresh rise to ₹173 and even ₹180, going forward.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)
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