The PSU stock rose from Rs 33.85 on August 4, 2023, to Rs 41.10 recorded on September 6, 2023, which translates into an upside of over 21% in a month. It has rallied by about 40% in the last 3 months.
The momentum seen in the past few months pushed the stock to a fresh 52-week high of Rs 42.70 on 5th September 2023.
The stock broke out from an 8-month consolidation range earlier in the month of August 2023. The stock hit a high of 36 levels on 15th December 2022 but it failed to hold on to the momentum.
The stock went into a corrective phase where it found support above the 200-DMA on the daily chart. The stock eventually broke out above 36 levels on 9th August 2023.
It has also witnessed a breakout from a falling trendline on the quarterly charts which has opened room for the stock to head towards 80 levels, suggest experts.
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 daily Relative Strength Index (RSI) is at 69.4. RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed. The daily MACD is above its center and signal Line, this is a bullish indicator.
“Bank of Maharashtra stock on its quarterly charts has witnessed a multi-year falling trend line breakout at 36.50 levels. The stock has been resisting the falling trend line from the past three quarters & has finally taken out in the current quarter,” Sujit Deodhar, Head – Technical Analyst, Wellworth Share & Stock Broking Ltd., said.
The PSU bank index has been an outperformer in the past many quarters & the smaller banks have the largest participation in it.
“Since Bank of Maharashtra stock has witnessed a multi-year breakout, the stock should be seen as a positional bet rather than just for trading,” he said.
“On daily charts, the stock has been trading above all its major long-term moving averages (50,100&200SMA) exhibiting the underlying strength,” highlights Deodhar.
“One can buy this stock at current levels of 41.85 & on any dips towards 36.50 levels for positional target of 85 levels with protective stop loss below 29 levels & a holding period of next 3-4 quarters,” he recommends.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)