UNIONBANK - Technical Analysis with Chart Patterns & Indicators

Last Updated Time : 20 Dec 25, 03:55 pm

Technical Rating: 4.0

📈 Technical Analysis

• Chart patterns: UNIONBANK is trading close to its 52-week high (154 ₹ vs 160 ₹), indicating strong bullish momentum with overhead resistance near the highs.
• Moving averages: Price above 50 DMA (149 ₹) and 200 DMA (139 ₹) confirms an established uptrend.
• RSI: At 56.0, momentum is constructive without being overbought.
• MACD: Slightly positive (0.92), supporting a near-term bullish bias.
• Bollinger Bands: Price likely near upper band, suggesting strength with risk of brief consolidation at resistance.
• Volume trends: Volume (89.5L) marginally above 1W average (87.3L), indicating steady participation on the advance.

🎯 Momentum & Trade Zones

• Support levels: 151–149 ₹ (50 DMA), 145 ₹, and 139 ₹ (200 DMA).
• Resistance levels: 158–160 ₹ immediate supply zone; a breakout targets 165–168 ₹.
• Entry zone: Accumulate on dips near 149–152 ₹ or on breakout-retest above 160 ₹.
• Exit zone: Book partial profits near 158–160 ₹; trail if breakout sustains toward 165–168 ₹.
• Trend: Stock is trending upward with strong near-term momentum; minor consolidation possible at resistance.

✅ Positive

• Trend strength: Price above 50 & 200 DMA with supportive RSI/MACD.
• Valuation: P/E 6.55 below industry 7.89; PEG 0.13 suggests attractive growth-adjusted value.
• Profitability: ROE 17.1% solid for PSU banking; EPS 23.5 ₹ provides earnings base.
• Income: Dividend yield 3.09% adds carry.
• Ownership: FII holding up +0.16% signals marginal foreign interest.

⚠️ Limitation

• Efficiency: ROCE 6.72% modest; leverage high (debt-to-equity 10.8 typical for banks).
• Proximity to resistance: Price near 160 ₹ raises pullback risk.
• Valuation vs book: Trading around book value (159 ₹), limiting rapid rerating without catalysts.
• Momentum risk: Bollinger upper-band proximity may trigger short-term cooling.

📉 Company Negative News

• Institutional: DII holding fell by -0.23%, hinting at softer domestic appetite.
• Earnings trend: Quarterly profit variation -9.97% indicates recent pressure.

📊 Company Positive News

• Earnings: PAT improved sequentially to 4,249 Cr. from 4,116 Cr.
• Technical: Sustained close above key DMAs with rising participation.
• Valuation & yield: Low P/E and 3.09% dividend support total return.

🏦 Industry

• Sector P/E: Industry at 7.89 vs stock at 6.55 suggests relative value.
• Backdrop: PSU banks benefit from credit growth and improving asset quality; sentiment favors leaders near 52-week highs.

📝 Conclusion

• Setup: Bullish uptrend approaching key resistance; expect either a brief consolidation or breakout.
• Strategy: Buy dips 149–152 ₹ or breakout above 160 ₹; take profits 158–160 ₹ and trail toward 165–168 ₹ on strength.
• Confirmation: A decisive close above 160 ₹ with volume would validate further upside; below 149 ₹, reassess risk.