Buy Bank of India; target of Rs 370: Way2Wealth

Way2Wealth's report on Bank Of India (BOI)

After making a high of 357 in May 2014 Bank Of India (BOI) turned its direction to enter into a correction phase. The stock corrected around 61.8% of previous rise from 165 to 357 which is a reasonable correction. Price action in the past three months has formed the bullish head-and-shoulders chart pattern on the daily chart. The downward sloping trend line is placed at 296 levels. In today’s trading session stock has penetrated the neckline resistance with strong bull candle coupled with above average volumes. This has confirmed the bullish pattern. Projected price target according to the chart pattern is at 370 levels.

Positive diversion in the daily RSI and positive crossover in the weekly MACD is also supporting the bullish view. Sustainable decline below 268.8 will fail the pattern and will negate our bullish outlook.

Investment Strategy:

Buy at 299.5 for the Target of 370 with SL at 268.8.Risk/return ratio: 1:2.3

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