We zoom in on the prospects of State Bank of India, as also the prospects of two other stocks тАФ Zomato and Union Bank of India
Is this the right time to buy the shares of State Bank of India (SBI)? The stock has fallen over 10 per cent since the beginning of this year.
Prabhu Maharaj, Chennai
SBI (тВ╣544.45): The recent reversal from the high of тВ╣629.65 made in December last year has happened from a very important long-term trend resistance. Although SBI has bounced back sharply from the low of тВ╣499.35, it is not showing any strong sign of a reversal. Resistance is in the тВ╣575-585 region. Support is in the тВ╣500-485 zone. As long as SBI trades below тВ╣585, there could be chances of seeing a wide trading range of тВ╣485-585 for a few months.
If SBI breaks below тВ╣485, the downside can extend up to тВ╣450 and even тВ╣410. So, this may not be the right time to buy this stock. However, if you wish to have SBI in your portfolio, buy 20 per cent of the intended amount at the current levels. Accumulate another 50 per cent at тВ╣505 and the balance at тВ╣460 if a fall below тВ╣485 happens. Keep the stop-loss at тВ╣390. Move the stop-loss up to тВ╣570 as soon as the stock rises to тВ╣630. Revise the stop-loss further up to тВ╣610 when the stock touches тВ╣650 on the upside. Exit the stock at тВ╣730.
I am holding shares of Zomato. My purchase price is тВ╣68.35. What is the outlook for this stock? Can I hold it or exit with loss?
P.K.N. Namboothiry
Zomato (тВ╣48.80): It is very difficult to give a concrete view based on Technical Analysis for stocks that have very less data. Preference will be to have at least five years of data to do a proper analysis. However will try to give a view here with the limited amount of data available for the stock of Zomato which got listed in July 2021. The stock has been in a downtrend. The bounce from the July 2022 low of тВ╣40.55 failed to get a strong follow-through rise above тВ╣70. Immediate resistance is at тВ╣54. Above that, тВ╣74-77 is the next important resistance zone.
Zomato has to rise past тВ╣77 indicate a trend reversal and become bullish. Only in that case, the stock can gain momentum and rally back to тВ╣130-150 levels. On the downside, there is a risk of seeing a fall up to тВ╣37 from here if the stock fails to rise above тВ╣54 in the near term. So, we suggest you exit the stock with a loss at current levels. Alternatively, you can consider investing the sale proceeds in some other good stock that looks strong on charts.
I have bought shares of Union Bank of India at тВ╣81. What is the short- and long-term outlook for this stock? My investment time-frame is one year.
Samarth P M
Union Bank of India (тВ╣73.91): The broader trend is still down for the stock of Union Bank of India. Strong resistances are at тВ╣94, тВ╣105 and тВ╣120. From a long-term perspective, Union Bank of India has to breach тВ╣120 to indicate that a fresh uptrend has begun. Immediate support is at тВ╣69. If the stock manages to sustain above this support, there are chances to see a rise to тВ╣100.
Since your time-frame is one year, keep a stop-loss at тВ╣66 and hold the stock. Move the stop-loss up to тВ╣86 when the stock touches тВ╣92. Revise the stop-loss further higher to тВ╣93 when the stock reaches тВ╣98. Exit at тВ╣102.
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