UCO Bank shares up 6% today, 46% in 7 days. Levels of Rs 22-23 may act as hurdle, say analysts

Shares of UCO Bank resumed uptrend, rising 6 per cent in Thursday’s trade after a fall in the previous session.  With this, UCO bank shares have rallied 46 per cent in the last seven trading sessions. The momentum is positive and more gains for the UCO Bank stock  are likely in the coming sessions, says technical analysts, who see the next resistance for the stock in the Rs 22-23 region.

The stock rose 5.9 per cent to hit a high of Rs 21.19 on BSE. The scrip fell 4.5 per cent on Wednesday session but is up 46 per cent in the last seven sessions.  

Pravesh Gour, Senior Technical Analyst at Swastika Investmart said the counter has experienced a rapid rally in recent days post a breakout of long consolidation. There was a breakout of an Inverse Head and Shoulder formation from the lower levels, with massive volume on the chart, he noted.

"The overall structure is distorted as the stock trades above all its SMA moving averages, and the momentum indicators are also positively poised. On the upside, Rs 23–23.50 are the significant and strong psychological resistance levels from where we can expect a profit booking while on the downside, Rs 17 will be the support during any correction," analysts said.

Tirthankar Das of Ashika Stock Broking said that buying demand emerged for UCO Bank from the major support area of Rs 10 and that the pullback rally thereafter led prices to move past the congestion zone, thus, offering a fresh entry opportunity with a favorable risk reward set up. Das said the stock has generated a breakout above the downward-sloping trend line from 2014 onwards.

"Previously there were multiple attempts to breach past the resistance zone of Rs 18-19 but it failed to do so. Currently, the breakout seems genuine as the volume trend has shown an accumulation indicating an increased enthusiasm to push prices higher. Immediate resistance is seen around Rs 23-23.50 as it happens to be the swing high of January 19, successive breach of which might extend the rally further towards Rs 32-33 in the near term. However, on the oscillator front, the stock is citing an overbought price condition, which might be a cause of concern in short term," he said.

Osho Krishan of Angel One  said the trend seamlessly has changed, but post such a rally one should not rule out the potential of cool-off or correction in the counter. Osho said the support for the stock has slightly moved towards Rs 18-18.50, followed by Rs 16.

He sees sturdy hurdle at Rs 22-odd zone. A weekly closure above the same could only add a fresh leg to the rally, he said.

Also Read: Delhivery shares rise after six days as Jefferies sees 115% upside

Also Read: Keystone Realtors shares rise 3% on market debut, commands m-cap of Rs 6,300 crore