Long-Term Trade Idea: Canara Bank Holds Firm Above Key Support, SEBI RA Sets ₹126 Target

Canara Bank is displaying bullish signals on the daily chart, indicating a potential buying opportunity for investors.

In the short term, the stock is finding strong support around its 14-day exponential moving average (EMA), signaling underlying strength, according to SEBI-registered analyst Deepak Pal.

On June 19, the stock rebounded from a key support zone near ₹104.60, which also coincided with the 55-day EMA. This jump indicates a potential reversal and has since been followed by a gradual pullback, Pal noted.

On June 24, the stock opened with a gap-up and has consistently held above its 14-day EMA, reinforcing the bullish trend. This stock tends to move steadily toward its targets, making it a suitable candidate, especially for long-term holdings.

Technical indicators, such as the moving average convergence/divergence (MACD), relative strength index (RSI), and Parabolic SAR, also support the bullish view, with no signs of immediate weakness, the analyst said.

Any minor dip towards support zones could offer a favorable entry point, Pal added, cautioning that a stop-loss should be set at around ₹110. On the upside, the stock appears poised to move toward the ₹125 - ₹126 range in the short term, a 10% premium to the current price.

The stock closed at ₹115.38 on Tuesday, having gained 15.3% year-to-date (YTD).

Canara Bank is a fundamentally strong PSU bank pick, Pal said. In Q4 FY25, the bank reported a 33% jump in net profit to ₹5,004 crore, driven by strong non-interest income.

Asset quality improved with gross NPA at 2.94% and net NPA at 0.70%. It has a robust credit growth, a 43% retail loan surge, a stable CASA ratio of 31%, and strong capital adequacy.

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