Bank shares rise 5% to ATH; where’s next?Provided by

As the broader market took off on Thursday, the banking sector wasn't left behind. The index surged 0.63% to 48,494.95 points, with one of its constituents – state bank of india (NS:), with a weighting of 9.9%, rose 5.12% to close at an all-time high of INR 812.

It is India's largest public sector bank with a market capitalization of INR 6,899.61 billion and is the sixth largest listed entity on the Indian Stock Exchanges.

As the stock jumps to unprecedented levels, it will be interesting to see how far it rebounds. To do this, let's look at the stock's financial score in InvestingPro to determine if it's a portfolio stock. This example has a score of 3 out of 5 and is eligible for further analysis.

Image source: InvestingPro+

To understand the current momentum, we look at 3 months of price history. The stock has gained 32.5% during that time, which isn't bad at all for such a massive company. In fact, after a rally like this, stocks often take a breather before resuming their upward trend.

Image source: InvestingPro+

An ever-present concern among such high-momentum stocks is whether the stock has reached its full potential. To do this, we focus on valuation gaps. The bigger the gap, the better. As far as SBIN is concerned, the stock has a fair value of INR 898 per share, with a decent upside potential of 10.6% from the CMP of INR 812.

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Additionally, looking at the technical charts, the stock just broke out, which could further add to the bullish sentiment on the stock.

Due to the stock's strong momentum and new breakthroughs, the valuation gap is still 10.6%. Investors can pay attention to this stock to make investment decisions. This quick framework for stock analysis can be replicated on other desks as well.

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X (formerly Twitter) – Ayush Khanna

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