Shares of India’s largest bank State Bank of India (SBI) are hovering around their record highs. 586 applications on BSE which were hit earlier this week. Domestic brokerage and research firm ICICI Direct looks to continue the upward movement of the stock based on technical factors.
“Nifty PSU Bank Index recorded a decisive breakout from the four-year downward sloping trend line, indicating a structural turnaround. Within the PSU banking space, we remain constructive on State Bank of India (SBI).State Bank Of India) Stocks saw a sharp upward move in retracement after it retested its 12-month range breakout zone 546 thus confirms a structural change. This bodes well for the next phase of the upward move,” the note said.
Structurally, the stock retraced a four-week decline in just two weeks, indicating a sharper pace of retracement. In the process, the price formed a higher base around the 50-day EMA, which on several occasions offered a fresh entry opportunity, the brokerage highlighted.
“We expect SBI share price to accelerate the upward movement and move gradually 634 in the coming months because this implied consolidation target of the last six weeks ( 578-516) coincides with the 161.8% external retracement of the February-March decline ( 546-425). Among the oscillators, the weekly MACD rose above its nine-period average, indicating a bullish trend in the upside,” ICICI Direct added with target price 634 more stop loss on SBI shares 546 with a time horizon of three months.
The brokerage house believes that a well-provisioned book along with overall strength in the lending franchise and liability growth of 12-14% guidance remains positive and improving return ratios provide long-term visibility for the stock. does.
“The Bank’s focus on a calibrated approach to growth, strong balance sheet with strong liability profile as well as healthy capitalization position it well to accrue further earnings growth. The recent quarter performed well on the business growth front with 14.9% year-on-year growth driven by the retail and corporate segments. We remain positive on future growth prospects with subsidiaries unlocking value to aid in valuations,” the brokerage note added.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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