MAY 6: Bank of India had bottomed out in the second week of January and moved up from Rs 32 on January 13 to Rs 62 on April 16. The rally was backed by a substantial jump in volumes. However, in its corrective phase, the stock fell to Rs 44 last week.If one were to go by the current position of price charts and oscillators, the scrip is likely to move up again. The stock has already taken support -- the support of its upward 4-month trendline. This is a positive sign for the stock.
Although the price is below both short and medium term averages, the averages are still in a positive phase. Positive averages indicate that the RSI oscillator is likely to form a negative divergence which require price to cross Rs 62 level.
At the current level, investors can take a long position. Keep a stop loss at Rs 43.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
