Canara Bank features as Bollinger Band Squeeze pick

Canara Bank Limited has been picked up by our Bollinger Band Squeeze scanner, which suggests that the stock is near a consolidation breakout. Bollinger Band Squeeze occurs when the volatility falls to low levels and the Bollinger Bands narrow. A volatility contraction or narrowing of the bands can foreshadow a significant advance or decline.

The stock had given a breakdown of upward sloping trendline support as on January 6, 2020 and thereafter, marked the sequence of lower tops and lower bottoms. Considering the weekly time frame, the stock is trading in a consolidation for the last five weeks. However, as of now, the price action has narrowed substantially and the stock is likely to give a consolidation breakout in the coming days.

Currently, the stock is trading below its 20-day EMA (90.75), 50-day EMA (117.25), 100- day EMA (148.85) and 200-day EMA (181.90), which indicates a medium and long-term downtrend. The leading indicator, 14-period daily RSI, is currently quoting at 33.60 and is in a super bearish zone.

Talking purely about the trading levels, the zone of Rs 77-Rs 73.65 level is a crucial support area and the level of Rs 94-Rs 95.50 is the resistance zone. A sustainable move on either side would lead to a trending move.