Canara Bank technical analysis: This leading PSU is eyeing a 20% potential upside

In a positive market landscape, Canara Bank Ltd, a stalwart in the PSU banking sector, has demonstrated remarkable strength, surging more than 7.5% in the current week. The bank is now poised for a breakout from a continuation price pattern, with its stock on the cusp of closing above the breakout trendline level.

Canara Bank is a leading institution in the commercial banking and financial services sector, providing a wide range of banking solutions. The bank operates across various segments, including Treasury Operations, Retail Banking Operations, Wholesale Banking Operations, Life Insurance Operations, and Other Banking Operations. Founded by Ammembal Subba Rao Pai on July 1, 1906, and headquartered in Bangalore, India, Canara Bank boasts a rich legacy, with over a century of experience in the banking industry.

From a technical perspective, shares of Canara Bank have been consolidating within a rising price range, oscillating between Rs 351.40 and Rs 268.80. A meticulous analysis of price movements, connecting the peak points of the first week of January 2023 (at Rs 341.70) and the last week of July 2023 (at Rs 351.40) on the weekly chart, reveals the emergence of a rising breakout trendline—a clear indication of a continuation price pattern. The recent consolidation phase has been further fortified by a bullish golden crossover involving the 5-13-26 Daily Moving Averages (DMA).

Furthermore, the 14-day Relative Strength Index (RSI) currently resides around 67.47 in the bullish zone. Notably, the stock is presently trading above the trendline of the mentioned pattern, supported by robust trading volumes totalling nearly 71 million shares. To confirm the breakout, the stock must maintain its weekly close above the breakout trendline level at Rs 355.

Remarkably, the stock reached a weekly peak of Rs 368.70 in the last trading session, showcasing its resilience and fuelling investor confidence. With the breakout now in progress, the stock sets its sights on a potential target of approximately Rs 425, signalling a gain of over 20% from the breakout point.

For short-term traders and investors, prudent monitoring of the stock is advised, given its consistent and impressive performance. The unfolding scenario presents an enticing opportunity for further upward momentum. Canara Bank Ltd is navigating market challenges with strength and determination, offering a promising outlook for investors seeking growth opportunities in turbulent times.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions