indian bank share price: Technical Stock Pick: This PSU banking stock hits fresh record highs in Feb 2024; time to buy or book profits?


Indian Bank Ltd, part of the PSU banking space, has rallied more than 60% in the last 6 months which pushed the stock to a fresh record high in February 2024 which suggests that bulls are here to stay.

Short-term traders can look to buy the stock now or on dips for a possible target above 600 levels in the next 3-4 weeks.

The PSU banking stock rose from Rs 343 as on 4th August 2023 to Rs 560 recorded on 5th February 2024 which translates into an upside of over 60% in the last 6 months.

The stock rose more than 12% in a week and over 20% in a month. The stock rallied more than 80% in the last 1 year, data from Trendlyne showed.

The stock consolidated around the multi-year swing high of Rs 428 which was first recorded back in November 2017 on the weekly charts.

The PSU stock moved in a range since September 2023 around this level and it finally broke out from the range in January 2024 on the weekly charts.In terms of price action, the stock is trading well above most of the crucial short- and long-term moving averages such as 5,10,30,50,100 and 200-DMA which is a positive sign for the bulls.

The momentum has pushed the stock into an overbought zone; hence some consolidation could be on the cards.

The daily Relative Strength Index (RSI) is placed at 84.4. RSI above 80 is considered strongly overbought. This implies that the stock may show a pullback. The daily MACD is above its center and signal Line, this is a bullish indicator.

“Indian Bank currently achieves all-time highs, signifying a robust and resilient market momentum. The stock exhibits a strong structural development, establishing higher highs and higher lows since March 2020,” Vidnyan S. Sawant, Head of Research at GEPL Capital, said.

This consistent upward trajectory aligns with a classical uptrend, reflecting a robust price structure.

Moreover, the Indian Bank maintains its position above both the 20-week and 50-week Exponential Moving Averages (EMA), reinforcing the bullish trend.

“The Moving Average Convergence Divergence (MACD) signals a bullish crossover in the positive territory, emphasizing the trend’s strength driven by substantial momentum,” highlights Sawant.

“A notable aspect is the ratio chart of Indian Bank against Nifty50, revealing a breakout from the 2019 swing. This breakout underscores the stock’s robust strength and potential for sustained outperformance compared to the broader market,” he added.

“Looking forward, there is an anticipation of further price ascent towards the 625 mark. It is recommended to set a stop-loss at 500, strictly based on the closing basis,” recommended Sawant.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of the Economic Times)

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