Central Bank of India Poised for Breakout Amidst Market Surge

During the recent monthly expiry trading session, the market exhibited a robust upswing, closing at the day’s peak. Leading this rally were the PSU banks, with the Nifty PSU Bank index breaking out from a trend continuation price pattern. A standout in this category is Central Bank of India, which is now catching the attention of market experts due to its potential for a similar breakout.

Company Overview

Central Bank of India, established by Sorabji Pochkhanawala on December 21, 1911, and headquartered in Mumbai, offers a broad range of commercial banking products and services. It operates through distinct segments: Treasury, Corporate and Wholesale Banking, Retail Banking, and Other Banking Operations. The Treasury segment manages government and other securities, money market, and foreign exchange operations. Corporate and Wholesale Banking provides services to trusts, partnerships, companies, and statutory bodies. Retail Banking targets individual customer needs and smaller business transactions.

Market Performance and Technical Analysis

After peaking on February 07, 2024, at Rs 76.90, Central Bank of India underwent a consolidation phase, finding strong support at the 61.8% Fibonacci retracement level, well above the 200-day moving average. During this period, a trend continuation pattern emerged, with a breakout level identified at Rs 66, marked by a trendline extending from the highs of February 16 to April 04, 2024.

The stock recently reached this critical level, closing marginally below it at Rs 65.80 in a recent trading session. A close above Rs 66, supported by robust trading volumes, would confirm the anticipated breakout.

Future Outlook

Following the breakout, Central Bank is expected to aim for a target of Rs 85, marking a potential 25% gain from the breakout point. With the PSU banks’ strong momentum and Central Bank’s promising trajectory, the stock offers an attractive opportunity for investors looking for substantial returns in the banking sector.

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.