SBI stock still under spotlight, expert says BUY with target price of Rs 368
SBI Share price today: Vishal Wagh, Research Head at Bonanza Portfolio says that SBI stock has fallen sharply in past few sessions due to the recent negative sentiment in the market because of surging number of Covid cases. The Banking and Financial sector remained under pressure. The PSU banks are already underperforming major indices
SBI Share price today: Vishal Wagh, Research Head at Bonanza Portfolio says that SBI stock has fallen sharply in past few sessions due to the recent negative sentiment in the market because of surging number of Covid cases. The Banking and Financial sector remained under pressure. The PSU banks are already underperforming major indices. Post the decent rally pre and post-budget the SBI has corrected along expected grounds and had touched levels of Rs 322. Thanks to the strongest demand zone between Rs 325 – Rs 340 a decent pullback is seen in the SBI. SBI share price today is Rs 342, up Re 1 or 0.35%. SBI share price has moved down from Rs 362 to Rs 342 in the last 1 week.
Bonanza Portfolio says that moving forward, the PSU bank indices and SBI is underperforming the major indices on a daily basis. But on a weekly and monthly basis, the chart set-up is still favouring SBI. The big candle Post budget is still valid and only retraced by 66% still the bottom of Rs 286 is not broken. Major support level of Rs 320 on SBI is strong and any further correction can only happen on the penetration of this level. Vishal said that on the higher side, the level of Rs 368 will be tested in a day or two and if it sustains above it then one can see the resumption of the uptrend.
The current newsflow regarding PSU banks has kept SBI under the spotlight. SBI has also given a sharp rally and gained more than 40% on a closing basis and 50% if we consider the recent top in Feb 2021.
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Before this kind of move, SBI was in the big range of Rs 230 – Rs 350, i.e. 120 points, from 2016 to 2020. On the downside, in Covid-19 fall, it has tested 150 which is 80 points down from the said range, which is approximately 67% of the range. Post breakout above Rs 350 it has tested Rs 427 last week which is again around 77 points up this is also around 65%. In short, as per the range breakout theory, both the side targets of 61.80% have been achieved, according to Wagh.
SBI started its current rally from the bottom of 150 and managed to touch 427. So, a Fibonacci retracement of 23.80% of the entire rally is around 362, Wagh says. There is one small dip post initial bounce back at 175 and 23.80% retracement from there is at 368. The last move of SBI started from 269.50, the 38.20% Fibonacci retracement is at 367. The last 8 weeks' rolling pivot is at 365. The 20 days' rolling pivot is at 369. There is an open gap on 5th Feb between Rs 358 to Rs 385, so multiple levels are showcasing major support around the Rs 358 – Rs 369 range, Wagh revealed.
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