Today's Pick - Canara Bank

We recommend a buy in Canara Bank from a short-term perspective. It is clearly evident from the charts of Canara Bank that it was on an intermediate-term downtrend, forming lower peaks and troughs, from its 52-week high of Rs 421 recorded in early January.

However, this downtrend got arrested at the support level at Rs 160 level in mid-July and the stock reversed direction. The stock has been on a short-term uptrend since mid July.

While trending up, the stock crossed over 21- and 50-day moving averages successively. On August 5, the stock decisively broke through the resistance level of Rs 200 by surging 7 per cent.

We notice good volume on advance days of the up move. The daily momentum indicator is featuring in the bullish zone. Moreover, the daily moving average convergence and divergence has entered in to the positive territory, reinforcing bullish momentum.

We are positive on the stock in the short-term horizon. We anticipate the stock to move up until it hits our price target of Rs 240 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 201.