Bank of Maharashtra registers multi-month breakout; what does it offer the traders?

Bank of Maharashtra regrets multi-month breakout! What does it offer for the traders?

by 5paisa Research Team Last Updated: Dec 10, 2022 - 05:12 pm 10.9k Views
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MAHABANK is currently trading at 16-month high amidst strong buying sentiment.

The PSU Banks are the top performers on Friday, with many of them surging nearly 10 per cent amidst strong buying sentiment. Driven by strong results and improvement in asset quality, investors have renewed their interest towards the PSU bank stocks. Meanwhile, the stock of Bank of Maharashtra (MAHABANK) has jumped nearly 9% during the first half of Friday’s trading session and has formed an interestingly price pattern on the technical chart.

On the monthly timeframe of the technical chart, the stock has crossed above its crucial resistance level of Rs 23 and currently trades at 16-month high. Supported by huge volumes, the stock has soared nearly 30% in the past two months, which is truly astonishing. On the weekly timeframe, it has registered a 41-week cup pattern breakout. Cup pattern breakout are considered quite bullish over medium term. Meanwhile, the 14-period daily RSI (78.88) is in the super bullish territory and above its prior swing high. The ADX (31.77) indicates strong trend strength. The OBV remains elevated and shows strong buying sentiment. In a nutshell, all the bullish technical parameters have been ticked and the stock is expected to trend higher in times to come.

On YTD basis, the stock has delivered over 18% returns to its shareholders and has outperformed the broader market. Interestingly, the stock looks undervalued as its PE currently stands at 9.27 as against sector PE of 13.60. It offers attractive dividend yield of over 2 per cent. The bank has been able to generate book profits in the past 3 financial years, and EPS has grown at a rate of over 60%.

On Friday, the stock has hit a fresh 52-week high level of Rs 23.15 on NSE. Considering such sound fundamentals and bullish technical parameters, one should keep a close watch of the stock’s performance in near future for trading and investing opportunities.

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