canara bank share price: Chart Check: This PSU bank hits fresh 52-week high in September; should you buy?

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Canara Bank, part of the PSU banking space, hit a fresh 52-week high in September 2023 and the chart patterns suggest that the rally may not be over yet.

Short-term traders can look to buy the stock for a possible target of Rs 425-540 in the next 2-3 months, suggest experts.

The stock hit a 52-week high of Rs 364 on 13 September 2023. It has rallied over 7% in a week and over 9% in a month. However, the stock has fallen from 800 levels recorded in November 2010.

The stock has created a strong base above Rs 70 in March-November 2020 period. The steady rise since then helped the stock to break out from a trendline resistance on the monthly charts.

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The stock has been making higher highs and higher lows for the past 3 months. It has rallied by over 15% in the last 3 months, Trendlyne data showed.

“The stock broke through a trendline that had been in place since November 2010. The stock’s returns from a price of 100 over the previous three years were 249%, compared to Nifty’s 74%, Banknifty’s 102%, and CNX PSU Bank’s 233%. The stock has displayed impressive gains, surpassing several prominent indices,” Suraj Bathija, Founder & CSO at AlgoBulls, said.

Furthermore, it currently stands above its three-year moving average, signaling a sustained long-term uptrend. It is also above its 36-DMA on a monthly basis.

“Further evidence that the stock is above the 12MA can be seen on the monthly chart. The stock has not closed beneath the MA in the last year,” highlights Bathija.

On the daily charts, the stock recently climbed above the 50-DMA earlier in September which is a positive sign for the bulls. It is trading above most of the crucial short- and long-term moving averages.

The monthly RSI is greater than 60. Since January 2021, the weekly RSI has not closed below the support level of 40, and it is currently trading above 60.

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The daily RSI is at 60.7. RSI below 30 is oversold and above is considered 70 overbought, Trendlyne data showed. The daily MACD is above its center and signal Line, this is a bullish indicator.

“On the daily chart, the stock has closed above its upper band, indicating that volatility will likely increase. When this is combined with the trend of the longer time frame, it is expected that the stock will continue to rise,” added Bathija.

“The stock is likely to reach 425 from a cmp of 353 and, once that target is reached, it is likely to reach 495 and 540 in the next 2-3 months (quarter),” 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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