Today's Pick - Indian Bank

We recommend a buy in Indian Bank from a medium-term perspective. From the charts of Indian Bank we observe that it had been on an intermediate-term down trend from its February high of Rs 256 till it recorded its 52-week low of Rs 78 on July 16.

The area around Rs 78 is a key support level and the stock reversed direction from here.

This reversal was supported by positive divergence in the daily relative strength index (RSI) and the moving average convergence and divergence.

On July 21, the stock jumped up 13 per cent breaking through its intermediate-term down trendline as well as the 21-day moving average.

The stock has gained 25 per cent over the past two trading sessions with heavy volume support.

The daily RSI is rising in the neutral region towards the bullish zone and the weekly RSI has recovered from the oversold region.

We are bullish on the stock in the medium-term horizon. We expect the stock to move up until it hits our price target of Rs 124 in the medium-term.

Traders with medium-term perspective can buy the stock while maintaining stop-loss at Rs 89.

via BL