Chart Check: 20% rally in a month! This PSU banking stock could give multibagger returns in the next 1-2 years

Bank of India Ltd, part of the PSU banking space, has rallied more than 20% in a month and the chart structure suggests that the rally may not be over yet.

Medium to long-term investors can look to buy the stock now as it could well double from current levels in the next 1-2 years, suggest experts.

The PSU banking stock rose from Rs 89.55 on 16 August 2023 to Rs 108.32 which is also the 52-week high recorded on 14 September 2023. The steep rise translates into an upside of over 20% in a month.

The momentum helped the stock to break out from multiyear falling trendline resistance on the monthly charts. The neckline of the channel was placed around 103 levels.

On the daily charts as well, 103 has acted as a strong resistance since 2018. A break above this crucial resistance level has given confidence to the bulls to scale higher highs in the long term, suggest experts.

In terms of price action, the stock is trading well above most of the crucial short- and long-term moving averages placed at 5,10,30,50,100 and 200-DMA.


“Bank of India stock on its monthly charts has witnessed a multiyear breakout from its falling regression channel @ 103.50 levels, thereby making a strong case for buy,” Sujit Deodhar, Head – Technical Analyst, Wellworth Share & Stock Broking Ltd., said.

The PSU bank index, as observed, has been the leader among the bulls & the smaller banks are seen maximum participation.

Post the breakout at 101.50 levels, the stock underwent a consolidation phase followed by a fresh swing breakout at 103.50 levels with strong volumes.

“On daily charts the stock is comfortably trading above all its major moving averages (50,100 & 200 SMA), with major technical indicators exhibiting fresh buy signal,” he said.

“A retracement drawn from the highs of 216.80 levels, unfolds the chart, with 38.20% Fibonacci level acting as resistance at 101.50 levels and a break above those levels on a quarterly closing basis will strengthen the bullish view,” highlights Deodhar.

“A target projected @ the levels of 330, which is the 161.80% retracement (drawn from highs of 216.80 to lows of 30.40), explains the investment approach towards this stock & one should buy & hold for at least the next 6-8 quarters, with stop loss below 65 levels,” he recommends.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)

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