Buy Canara Bank; target of Rs 460: ICICIdirect

ICICIdirect.com's report on Canara Bank

"The share price of Canara Bank resolved higher out of the falling trend channel during current weeks’ trade signalling the end of the corrective phase since May 2014 and resumption of the medium-term up trend offering a fresh entry opportunity to ride the up move.

The stock price doubled during March - May 2014 period from its lows of Rs 206 to May 2014 high of Rs 478 shrugging off the bearish trend of preceding four years. In the process, the share price pierced through the long term trend line resistance drawn by connecting 2010 and 2013 peaks. Significantly, the same trend line has changed its role as support during the recent corrective decline since the May 2014 peak. Over the past three weeks, the stock price consolidated in a narrow range above this key support resulting in a basing formation, which provides necessary impetus for the next up leg. Interestingly, the support near Rs 370 is also validated by the 38.2 percent Fibonacci retracement of March - May 2014 rally (Rs 206-478).

Among long term momentum oscillators, the weekly RSI is seen generating a fresh positive crossover above its nine period average indicating positive momentum in the stock from a medium-term perspective.

Read More