We all know that banking sector (in stock market) is beaten very badly from last few months. Front runner stock among banking sector is SBI & it has came down from 2400 to 1500.
As seen in fig we can observe that SBI was going in down trend & from last few days it has broken down trendline which have drawn by us (see fig for clear view)
Any stock which is in down trend beaks trendline towards upside, it needs to make higher peaks & higher bottoms for future uptrend. In SBI, it has broken down trendline & made high at 1700. This level itself has more significance as 50 days moving average stood at 1700. SBI returned from 1700 & trading at 1660 currently but when it has made red candle(down side movement), volumes weren’t that much compare to when SBI were recovering.
It shows that more buyers than sellers in SBI currently which is positive sign for any stock.
When we use Fibonacci retracements, we find recent rally’s (1452 to 1707) 38.20% retracement is near 1610, 50% @1580 & 61.8% @ 1550. These are short term supports for SBI, & we can buy SBI shares near that levels.
RSI is also strengthening, it is currently at 55.
Volumes are encouraging.
50 Days Moving averages near 1700, if SBI breaks it with good volume then short covering will take SBI near 2000 level we guess.
It is smart thing to buy SBI near 1610, 1550 with strict Stop Loss below 1550 & target 2000 for short to medium term.
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