PSU Banks were down and out in Jan 2016.
Then this happened on March 01 2016
PNB stock was totally down and out but the budget and RBI steps resulted in a big bounce from the low. A bottom was in place. But stocks just don’t rally from lows. The down and out stocks after rally see sharp profit booking and then skepticism comes in which offers a much more promising and durable opportunity to traders. PNB formed a double bottom in May and rallied like crazy as you can see in the chart below
Source: Chartalert.com
The rally changes the PE and stocks become buy on dips on every pullback to major moving average. PNB offered another opportunity in Jan 2017 when it pulled back to 200 dma. I covered it back then.
Here’s what PNB has done
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers