Bank of India - Head and Shoulder Bottom

Bank of India (BANKINDIA) has shown surprising strength in the downfall. It did 188, which when you look at the monthly charts is a 61% retracement of the rise from 2001. This is a huge support, and it is unlikely that it will penetrate 182. Any long-term trader could have longed BANKINDIA with 182 as stoploss. Having bounced from 188, Bank of India has shown tremendous strength rallying even in gut-wrenching volatile situation. This shows that accumulation is happening.

Now, let us look at it from a technical perspective. Bank of India appears to be forming a clear Head and Shoulder bottoms, also called the Inverse Head and Shoulder. The left shoulder at bottom is clearly visible, and the head was formed when Bank of India hit 188. Since then a right shoulder appears to be forming. This is an important time to watch Bank of India. A trade can be contemplated with 206 as stoploss, below which the IHS fails and a sharp down can be expected.

Once BankIndia crosses 250, its potential target would be 325, with some resistance at 294. Trade it long above 250, with stoplosses in place, and exit at 294, keeping the rest for 325.