Central Bank shares extend gains, jump 7% today amid heavy volumes; more upside possible?

Shares of Central Bank of India Ltd continued to rise for the third straight session in Tuesday's deals amid heavy trading volumes. The stock today jumped 6.80 per cent to hit a day high of Rs 29.39 over its previous close of Rs 27.52. Around 20.18 lakh shares changed hands on BSE today, which was more than twice compared to the two-week average volume of 7.38 lakh shares. Turnover on the counter stood at Rs 5.83 crore, commanding a market capitalisation (m-cap) of Rs 25,105.28 crore.

The sharp upward movement in the share price came despite a drop in most banking shares today. At today's high price of Rs 29.39, the stock traded 29.69 per cent lower from its 52-week high of Rs 41.80, a level seen on December 14, 2022. That said, it has gained 80.86 per cent from its one-year low of Rs 16.25, hit on June 20 last year.

The state-owned lender would hold its 16th Annual General Meeting (AGM) on June 30 (Friday) at 11 am. In the March 2023 quarter (Q4 FY23), it reported an 84.19 per cent jump in net profit, at Rs 571 crore, as bad loans fell. The bank's net profit was Rs 310 crore in the year-ago period.  

On technical setup, the stock was last seen trading higher than the 5-day, 20-, 50-, 100- and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 69.29. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-earnings (P/E) ratio of 15.10. It has a price-to-book (P/B) value of 0.82.

The scrip has an average target price of Rs 37, Trendlyne data showed, suggesting a potential upside of 27.15 per cent. It has a one-year beta of 0.84, indicating low volatility on the counter.

Support on the counter could be seen at Rs 26.75.

AR Ramachandran from Tips2trades said, "Central Bank looks bullish on the daily charts with the next resistance at Rs 29.50. A daily close above this resistance could lead to target of Rs 31 in the near term. Strong support will be at Rs 26.75."

VLA Ambala, Research Analyst at Stock Market Today, said, "The stock is taking support at its previous resistance levels as the breakout is sustaining. Fresh long positions can be initiated here. Investors can buy at current levels for targets between Rs 31 and Rs 40, keeping a stop loss placed at Rs 23.70."

Meanwhile, Indian equity benchmarks trimmed their early losses in afternoon deals today as strength in technology and metal shares countered weakness in banks and financials.

Also read: Timken India, HDFC AMC, ICICI Bank, HDFC Bank, Adani Enterprises and Tata Motors see high turnover