Buy Union Bank of India; target of Rs 255: ICICIdirect

ICICIdirect.com's report on Union Bank of India (UBI)

"After witnessing a sharp run up post the election verdict, PSU banking stocks failed to sustain their levels and witnessed declines of more than 25% from their peak. At the same time, fresh short addition was evident in the midcap segment. Stocks like IOB, Syndicate Bank and Union Bank witnessed significant short accumulation since the June series. We are witnessing short covering trend in PSU banking stocks."

"Early signs of short covering are evident among these stocks as the September series has started with lower open interest than last series. At the same time, from the beginning of the series, marginal short covering was experienced in these stocks. We believe Union Bank is likely to witness a fresh up move on the back of short covering as it has relatively outperformed some of its peers."

Recommendation Buy Union Bank in the range of Rs 212-216Target: Rs 255Stop loss: Rs 194 (on closing basis)Time Frame: Three months

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