Chart Check: Bank of Baroda breaks out from rounding bottom pattern; where is the stock headed?

The stock rose from Rs 166 recorded on April 10th, 2023 to Rs 203 as on 10th July 2023 which translates into an upside of over 22% in 3 months.

The PSU stock witnessed some profit-taking after hitting a record high of Rs 210 on 10th July 2023.

However, experts are of the view that as long as the stock holds above the neckline of the rounding bottom breakout placed at around Rs 197 level, bulls should be able to take control.

A rounding bottom is formed when the market sentiment shifts from bearish to bullish at a steady pace. This pattern is usually formed at the end of the downtrend. Also Read

In terms of price action, the stock is trading well above most of the crucial short and long-term moving averages of 5,10,30,50,100 and 200-DMA on the daily charts which is a positive sign for the bulls.

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The daily Relative Strength Index (RSI) is placed at 64.1. RSI below 30 is considered oversold and above 70 is considered overbought, Trendlyne data showed. MACD is above its center and signal Line, this is a bullish indicator.

Bank of Baroda has exhibited exceptional performance, evident from its rising ratio against the benchmark index Nifty PSU bank.

“Bank of Baroda stock displayed a breakout of the rounding bottom pattern near the support level within a parallel channel. This breakout signals a potential reversal towards upward movement,” Omkar Patil, Technical Research Associate at GEPL Capital, said.

“Moreover, on the daily time frame, Bank of Baroda’s stock price is currently positioned above significant moving averages, including the 50-day, 100-day, and 200-day Exponential Moving Averages (EMA). This indicates a positive trend and strengthens the bullish case,” he said.

“Furthermore, the Relative Strength Index (RSI) on the daily timeframe has experienced a breakout, indicating the presence of positive momentum in the stock. This suggests a potential continuation of the upward trajectory,” added Patil.

“Going ahead we expect the prices to move higher till Rs 240 level where the stop loss must be Rs 195 strictly on the closing basis,” he recommends.

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