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The outlook for the stock of Allahabad Bank is bullish. The stock surged over 4 per cent on Tuesday. It has closed decisively above the key resistance level of ₹45 as well as the 200-day moving average. Key support is poised in the ₹45-₹44 region which is likely to limit the downside in the near term. Dips to this support zone is likely to find fresh buyers coming into the market.
The indicators on the charts are also positive. The 21-day moving average has crossed over the 100- and 55-day moving averages. It is now on the verge of crossing over the 200-day moving average. This is a bullish signal indicating that the downside could be limited. The stock can test the immediate resistance level of ₹50 in the near term. A strong break above this hurdle will then pave way for the next target of ₹55 over the short term.
Traders can go long at current levels and also on dips at ₹46. Stop-loss can be placed at ₹43 for the target of ₹54. Revise the stop-loss higher to ₹49 as soon as the stock moves up to ₹51.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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