Long Term Investment: Central Bank
Amongst all the PSU Banks, one of the stock which was seen depicting some good pattern on the Technical charts is Central Bank. We have been having an eye on this stock for quite some time but it had remained very much range bound and therefore the movement in this one was a bit slow. However the inherent bullishness is reflected on the higher degree charts as the stocks has been successfully managing to hold on to the multiple supports (trend line and moving averages). This also clearly indicates the consistent buying pressure fueling the prices at lower levels and confirming the bullish prospects of the stock.
This can be made out from the weekly chart appended alongside, where prices have been forming an accumulation pattern,highlighting excellent and strong trend in progress. The stock made its debut in August 2007. However failing to meet expectations of its market participants, immediately slipped lower. Level 156 was the top made as the rising attempt in Jan 2008 turned futile and the stock slipped into a sharp corrective phase.
The decline turned to be severe one when the prices came down even breaking its listing low and touched a low at 32 in December 2008. However the optimism was reflected as although the prices threatened to break below these levels some demand at lower levels helped them to bounce back and produce some pullback rallies since March 09. The underlying trend started growing stronger as the series of minor higher tops and bottoms helped the scrip to shift its bias on bullish side and complete a nice rounding pattern near 160 levels by start o Oct 09. But the presence of strong supply near this level kept the
rise restricted over past 4 months leading to some range bound moves in this one. All this can be clearly seen in the form of upper shadows near 160-65 region. No doubt that only a volume led action above this level will bring in some directional moves into the trend. But the big picture is positive with the prices nicely maintaining a sequence of higher highs and lows above 13 period MA and also a trend line. The momentum on the RSI oscillator is also in line with the affirmative development seen in the prices thereby adding more strength to the trend. Active buying is continuing to exist during all the corrective dips and we advise our readers to do the likewise. A strong breakout from the pattern above 165 will open more room for new higher targets. This would be around 200-220 level at the Minimum. Periodic dips will no doubt be seen but such fall should be used to buy in to this stock.
One may also keep an ear to the ground to pick up some news that may further help to boost the trend in this stock. Pattern target comes around 300. Important levels to watch out for are at 242-262.
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Category: Long Term
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