ICICI Bank, SBI, BoB: Seven bank stocks cross 200-DMA, may surge 15%

Shares of PSU Banks were outperforming the benchmark indices for a second straight day on Tuesday. The Nifty PSU Bank index was up 0.3 per cent at 12:05 PM, as against a 0.6 per cent dip in the frontline Nifty50 index. Among individual shares, Indian Bank, Bank of Maharashtra, Canara Bank, and UCO Bank were ruling up to 4 per cent higher. 

Of late, major bank stocks -- such as ICICI Bank, City Union Bank, Federal Bank, State Bank of India, Bank of Baroda, Canara Bank and Indian Bank -- have started giving bullish signals as they conquer 200-DMA (200-daily moving average).  I

While 200-DMA may seem as a simple mean average of 200 trading sessions, it has been affecting trading judgements for centuries. Technical analysts, especially, opt for 200-DMA to track shift in momentum from bearishness to bullishness and vice versa. 

Stocks trading over 200-DMA suggest likely bullish moves ahead, with stocks ready to clock fresh up moves. Likewise, stocks beneath 200-DMA are looked upon as weak instruments and are anticipated to fall further. 

Typically, stocks witness 15 -25 per cent surge in the short-to-medium term whenever they cross 200-DMA on the upside. In our present scenario, Bank of Baroda, Canara Bank, and State Bank of India may see even better returns as they have also broken out of "Double Bottom" pattern.

The table below highlights the key levels for these banks and expected up move, based on technical charts:-

Source: spidersoftware