Technical Analysis

Tech query: Bank of Baroda on a medium-term uptrend

Yoganand D | Updated on January 16, 2021

I have purchased Bank of Baroda shares at ₹92. What could be the outlook for BOB shares in the next three months? Can I hold them for the long term?

Yadu Narayanan

Bank of Baroda (₹75.2): Since encountering a key resistance at ₹225, the stock of Bank of Baroda has been on a long-term downtrend. In early January 2020, the stock breached a key long-term support at ₹100 and continued to decline.

After recording a multi-year low at ₹36 in May 2020, it took support and changed direction, triggered by positive divergence on the weekly chart. Since then, the stock has been on an intermediate-term uptrend.

In early December 2020, it conclusively breached a vital barrier at ₹53 and continued to trend upwards.

Witnessing buying interest, the stock jumped 14.7 per cent with good volume last week. The stock now trades well above the 21- and 50-day moving averages.

Going forward, it could face resistance at ₹85. An emphatic break above this level can take the stock northwards to ₹100.

Further rally beyond this hurdle can underpin the bullish momentum and pave the way for an upmove to ₹120 and then to ₹140 over the long term.

On the other hand, the stock has a key medium-term support at ₹60, which could provide base during corrective declines. Immediate supports are placed at ₹70 and ₹66. You can remain invested and consider averaging the stock on declines with a stop-loss at ₹55. For the long term, you can place the stop-loss at ₹44 and stay invested.

A conclusive rally beyond ₹140 can push the stock northwards to ₹160 and then to ₹180 over the long run.

Please give the outlook for the stock of Route Mobile.

Subhas

Route Mobile (₹1,148.5): Since its listing in late September 2020, the stock of Route Mobile has been on a medium-term uptrend. With a limited history, the key resistance is at ₹1,27,5 which is the 52-week high registered in early December last year.

The stock has been on a short-term sideways movement since then, in the band between ₹1,000 and ₹1,275.

A decisive break above the upper boundary can take the stock higher to ₹1,300 and then to ₹1,350 or 1,400 levels over the medium term.

However, a fall below the psychological support level of ₹1,000 can drag the stock lower to ₹900 initially. A slump below ₹900 can alter the medium-term uptrend and pull the stock down to ₹800 and then to ₹700 levels.

Nevertheless, a strong downward break of the key support level of ₹700 can pull the stock lower to ₹600 and then to ₹500 over the long term.

Investors with a medium-term horizon can remain invested with a stop-loss at ₹870 levels.

Send your queries to techtrail@thehindu.co.in

Published on January 16, 2021

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