Commercial Bank from a Technical angle

As the market is so weak and without any excitement, anything is looked at with a negative mind, and pessimism.This is the case with Commercial Bank too. Given the not so great opportunities from the budget, Commercial Bank performance can be viewed as at "Cross Roads". Therefore from a fundamental perspective, proper direction and clarity can be seen only after a few Quarters into 2016. However if you look at it through Technical Analysis, it gives a "not so dismal picture".

You see, the Banks were the ones who took the Market up from 4725 points in June 2012 to 7600 in Jan 2015. Thanks to the Banks the ASI and the SPSL 20 went up. But did you know that during this period the Banking Sector went over the 2010-2011 all time levels, when the ASI was below it's all time high levels??? As a matter of fact the ASI did not follow the banks to break the 2010-2011 all time highs, but the Banks did.

So what happened? when the rest of the market did not give the banks a run, obviously the banks chickened out and moved sideways. Banks were everybody's darling. All wanted the banks to dance for the rest to join.

In 2010 Sep-Oct period Commercial bank hit a high of 147.50(adjusted to splits,and scrip divs), and retraced below 100 during the ugly 2011-2012 period. But with the market, steaming up from June 2012, the stock broke the resistance of 140.00 in July 2014 and propelled it self to record a new all time high of 194.00 on the 12th of January 2015. So when the market is not moving, obviously it too had to retrace. But the best thing is that it has now come down to the major long term support of 140.00.Moreover the RSI is also at the lowest in 7 long years. 

I do not recommend a buy on this, but it is damn good to keep an eye on. The reason is that Com Bank is one of the biggest Banks, and has a big say in the direction of the overall market.

For any position to decided upon, the support at 140.00 is so critical. Any moment it falls below this level, will not be good. If the stock holds at that strong pivot of 140.00, then in the short term, meaning from now to the 1st or the 2nd week of Jan'16 it could test 150 to 155. So for any one who wants to move in to it at 142, a strong Stop loss at 140 is critical, to exit at 150. That is a return of 3.27%.