Analysis: PNB

Today’s pick is PNB [stockquote]PNB[/stockquote]. The stock saw a double top at the beginning of the year and started its descent to Rs. 700 levels. It then was range bound between Rs. 700 – Rs. 850 from June to November. In December it saw a bullish breakout of the range, but scrip found strong resistance around Rs. 900 levels to pull it back to Rs. 850 levels. In the last three months, the stock moved -2% same as that of the Nifty’s.

PNB Technical analysis chart

Oscillator RSI and CMO are in no man’s land. The stock is trading in the lower end of a compact Bollinger band giving out a bullish signal. Short-term technical saw a 9×4 bearish signal a couple of days ago.

The MACD line and signal line are moving parallel to each other without giving any directional bias. Also, Long-term and short-term GMMA lines are currently inverted and are contracting giving a bearish bias for the stock.

PNB correlation chart

PNB’s average correlation with the Nifty is 0.68 which is positive and strong. The scrip will be replicating movement of Nifty. [stockquote]NIFTYBEES[/stockquote]

PNB Volatility chart

PNB has a historical volatility in the range of 0.3 to 0.6. The scrip’s volatility is currently in the higher end of the range.

Given these technicals, we suggest a short-term sell. A long-term Watch is suggested given the range bound movement. A call could be taken depending on the directional break-out of the range.

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