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We recommend a buy in Union Bank of India from a short-term horizon. It is clearly evident from the charts of Union Bank of India that it has been on an intermediate-term uptrend since its 52-week low of Rs 96 recorded in early July. Within this intermediate-term uptrend, the stock formed an ascending triangle pattern spanning over the past two months.

Generally, ascending triangle patterns are bullish continuation pattern. On October 16, the stock broke out above the upper boundary of this triangle at Rs 156, accompanied by robust volumes; gaining 6 per cent. Furthermore, the stock penetrated its 200-day moving average on the same day and is trading well above 21 and 50-day moving averages. The daily relative strength index (RSI) has entered in to the bullish zone and weekly RSI is on the brink on entering this zone from neutral region. The moving average convergent and divergence is featuring in the positive territory and signals a buy. Considering the above positive facts, we are bullish on the stock from a short-term perspective. We expect the stock to rally until it hits our price target of Rs 178 in the approaching trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 153.

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