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Investors with a short-term perspective can buy the stock of Union Bank of India at current levels. The stock jumped 4.7 per cent accompanied by good volume, breaking above a key resistance at ₹83 on Tuesday. Following a short-term downtrend from mid-January to mid-February the stock found support at ₹67.5. Subsequently, the stock changed direction triggered by positive divergence in daily relative strength index. Since then, the stock has been in a budding short-term uptrend.
While trending up, the stock decisively breached its 50- and 200-day moving averages in early March and hovers well above them. There has been an increase in daily volume over the past three weeks. The recent rally has strengthened the uptrend as the stock conclusively breaks a medium-term resistance at ₹83.
The daily relative strength index features in the bullish zone and the weekly RSI continues to chart upwards in the neutral region. Also, the daily price rate of change indicator hovers in the positive territory implying buying interest.
The short-term outlook is bullish for Union Bank of India. The stock can extend the upmove and reach the price targets of ₹91.5 and ₹93. Traders can buy the stock with a stop-loss at ₹86.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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