PSU Banks have really struggled over the last 10 years. Even a large bank like State Bank of India has not been able to avoid chaos.
Reckless lending to crony capitalists under UPA regime made NPA crisis worse and this was the state of SBI stock in 2016.
Thanks to reckless lending under super guidance of UPA Manmohan and Sonia – SBI trading at lows of CY 2009 pic.twitter.com/Mc2C5HheA3
— Deepak Singh (@smarket) February 22, 2016
Rising from the Ashes – The worst is in
You cannot bet against stock like SBI beyond a point. SBI stock reached that point of maximum pessimism when it touched 150 and the bounce was expected
Source: Chartalert.com
The bounce came from the levels of 150 and the stock doubled in value in the following 20 months. Also, it became quite clear that the Govt will recapitalize the stock. A new base of 240 was established.
Is State Bank of India forming a new base?
Source: Chartalert.com
Indian economy cannot become a prosperous economy without a strong State Bank of India. With the Govt now hyper-focused on economy and markets, one can expect SBI to do better from here on. SBI seems to be forming a base at 230-240 levels and it’s likely that this stock can surprise on the upside. If not, there is always a stop loss one can place below 220 levels 🙂
SBI is trading in a box with support near 230-240 and resistance near 330 levels. So, its a BUY LOW and SELL HIGH stock for now.
The article has been written purely for educational purpose.