PNB surges with volume spurt, breaches 21-day EMA level

The bank which has been the talk of D-Street since the unveiling of Nirav Modi scam in January, gained as much as 5.3 per cent on Friday. The stock of PNB witnessed a kind of a Symmetric Triangle breakout on the daily time frame with volume spurt.

Multiple agencies have been appointed to investigate the money siphoning cases against Nirav Modi, Mehul Choksi and their allies followed by official complaint by the bank itself. CBI examined four PNB officers who belonged to the forex department. It was found that even the external commercial borrowing forms, which are required for processing loan, were not attached and yet the loans were issued.

Nevertheless, PNB is confident of recovering the concerned losses within the next six months. Technically, the stock fell nearly 53 per cent after resisting twice at 197 levels on January 24 and 25. Since March 1, the stock has been consolidating at lower levels up till now. Within the consolidation, the stock on Friday witnessed a triangular pattern breakout at 98.90 levels. Further, the stock also broke out of its 21-day EMA level of 100.70 on the upside on a closing basis, first time after January 29. The 14-period RSI has bounced back from the over-sold zone and is nearing 50 levels. With this the stock may see 6-8 points upside in the first place.