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The near-term outlook is bullish for the stock of Canara Bank. The stock rose 4.5 per cent on Monday. Prior to this rise, the stock was stuck inside a narrow range between ₹224 and ₹227 for three days. Monday’s rise has broken this sideways move and has also taken the stock decisively above its 200-DMA poised at ₹221. Significant support is at ₹228. The 200-DMA is also a key short-term support.
A rise to ₹250 looks likely in the near-term. A strong break above this level can take the stock further higher to ₹258 – the 50 per cent Fibonacci retracement level. Traders with a short-term perspective can go long. Stop-loss can be placed at ₹227 for a target of ₹250. Accumulate long on dips near ₹230. Revise the stop-loss higher to ₹240 as soon as the stock moves up to ₹245. The outlook on the stock will turn negative only if the stock declines below the 200-DMA support. Such a break can drag it lower to ₹215 and ₹213.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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