Canara Bank

We recommend a sell in Canara Bank from a short-term trading perspective. It is apparent from the charts of Canara Bank that it was on a medium-term up trend from its October low of Rs 136 to January peak of Rs 223.

However, in mid January, the stock began to loose its bullish momentum and reversed direction. On January 15, the stock tumbled by 8 per cent following selling pressure. This selling pressure continued and on January 23, the stock dived 14 per cent, accompanied with heavy volume. This decline conclusively penetrated the 21- and 50-day moving averages.

The stock is currently trading well below these averages. The daily relative strength index is falling in the neutral region towards the bearish zone. Moreover, moving average convergence and divergence has entered the negative territory. Our short-term outlook is bearish for the stock. We expect the stock to decline until it hits our price target of Rs 160 in the upcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 187.