Trading - Canara Bank

We recommend a sell in the stock of Canara Bank from a short-term perspective. It is evident from the charts the stock has been on an intermediate-term uptrend from its March low of Rs 144. However, the stock’s medium-term uptrend that commenced from August low of Rs 252 accelerated and the stock encountered resistance at Rs 395 in the second week of October. Subsequently, the stock reversed direction triggered by the negative divergence displayed in the daily relative strength index (RSI) and the momentum indicator hitting over-bought territory. On October 27, the stock tumbled 6 per cent breaching the 21-day moving average and reinforcing the short-term downtrend. The daily RSI has slipped in to the neutral region from the bullish zone and weekly RSI is on the verge on slipping. Besides, the daily moving average convergence and divergence has signalled a sell. We are bearish on the stock from a short-term perspective. We anticipate it to dive until it hits our price target of Rs 305. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 356.

via BL