Shares of Punjab National Bank closed below Rs 100 apiece on Feb. 27 for the first time since June 2016 as the state-run lender battles the fallout of a Rs 13,000-crore alleged fraud involving billionaire jeweller Nirav Modi and his firms.
The bank’s stock has plunged 57.5 percent from the high on Oct. 26 last year, a day after the government announced its plan to infuse Rs 2.11 lakh crore in state-run lenders to boost capital amid mounting bad loans.
PNB is trading well below its key support levels—the 50-day, 100-day and 200-day moving averages. In fact, it closed 37.5 percent below its 200-day moving average, the lowest since early 2016.
The stock declined after making a double-top and hitting an intraday high of Rs 231.6. It now stares at a double-bottom like in 2016. A double top is a popular technical analysis pattern which has two peaks of the near-same level with consolidation in between. A double-bottom is the reverse of it.
The stock price is trading below the Fibonacci 61.8 percent retracement level of Rs 131.3 per share—another key support level.
The current price-to-book has plunged below 0.5 and the one-year forward multiple stands at over 0.5, indicating higher valuations in the future.