City Union Bank has been in a trading range of 200 to 120 for the last 2 years after hitting a high of 249 at the start of 2020.
After covid hit in 2020 it has gone into a long consolidation till today.
For the last few months, it is trading around the bottom (120) of the 2-year range (200-120).
Price has hit this level many times before and got significant gain. Along with the monthly volumes, there has been a significant increase in weekly volume, a clear indication of buyers' interest.
As the stock is trading in the same zone a bounce from here is expected. Most importantly the range of 130-110 is an institutional demand zone. As this demand zone has been formed on the monthly chart. So this zone becomes an interest area for institutions to accumulate new shares under this zone. This month we have seen an increase.
Indicator Analysis.
1. Price has been trading above the long-term MA of 200, which signifies that the primary up trend is still intact in this stock.
2. MFI (Money Flow Index) suggests some kind of inflow of money into the stock as it has formed a positive divergence on the weekly chart.
3. Along with the MFI RSI also forms a bullish divergence near oversold are. The bullish divergence on RSI indicates that the price started gaining positive momentum after a long time.
4. One more interesting thing in this stock that can't be seen through the naked eye is the behavior of buying for the last 5 months.
I have gone through the volume analysis of the last 5 months. By observing the last 5 months volumes observed that there are days when the volumes are spiking up. These spikes in the volume triggered me irrespective of color. I went through the deliverable quantity on these days and observed the high deliverable qty. It signaled that there is some smart money entering the stock.
I have attached the deliverable qty data below only on those specific days.
As per my observation, this stock has the potential to move up to 200 and after a few months, it will move out of this range and will move up to 260 and then 350.
Comments