Canara Bank’s 2.87% Weekly Decline Amid Mixed Momentum and Derivatives Surge

27 January: Mixed Technical Momentum Amid Modest Gains

On 27 January, Canara Bank’s stock closed at Rs.154.75, up 1.98% from the previous close, outperforming the Sensex’s 0.50% gain. The day marked a subtle shift in technical momentum from bullish to mildly bullish, with mixed signals from key indicators such as MACD and RSI. While the monthly MACD remained bullish, weekly indicators suggested some short-term caution. The stock traded above all major moving averages, signalling underlying strength despite the nuanced outlook. The increase in open interest in derivatives also began to reflect heightened market activity.

28 January: Surge in Derivatives Open Interest Signals Active Positioning

Canara Bank saw a significant 12.6% rise in open interest in its derivatives segment on 28 January, with futures volume reaching 25,991 contracts and options notional value exceeding ₹20,615 crores. The stock closed at Rs.157.80, up 1.97%, continuing its upward momentum and trading near its 52-week high of Rs.159.05. Despite this, delivery volumes declined by 3.2%, indicating a divergence between speculative derivatives activity and long-term investor accumulation. The stock remained above all key moving averages, reinforcing a strong technical uptrend.

29 January: New 52-Week High Followed by Sharp Intraday Correction

On 29 January, Canara Bank’s shares surged to a new 52-week high of Rs.160.80, reflecting strong market momentum and a cumulative three-day rally of 5.04%. The stock outperformed its sector and broader market indices early in the session, trading above all key moving averages. However, the day ended with a sharp reversal as the stock hit an intraday low of Rs.148.95, closing at Rs.150.30, down 4.75%. This 5.23% daily loss contrasted with the Sensex’s 0.38% gain, highlighting profit-taking and short-term selling pressure. The derivatives market activity intensified, with open interest surging 37.5%, indicating active repositioning amid mixed price action.

Technical indicators showed the stock trading below its 5-day, 20-day, and 50-day moving averages, signalling short-term weakness despite longer-term support from the 100-day and 200-day averages. Institutional holdings increased by 0.96% quarter-on-quarter to 25.1%, reflecting sustained confidence despite volatility. The MarketsMOJO rating was upgraded to Buy on 28 January, with a Mojo Score of 75.0, reflecting improved fundamentals and technicals.

30 January: Flat Quarterly Results and Mixed Technical Signals

Canara Bank reported flat quarterly performance for December 2025, with a sharp decline in its financial trend score from 13 to 5 over three months. While interest earned reached a record ₹31,981.60 crore and profit after tax peaked at ₹5,155.11 crore, operating profitability contracted significantly, with PBDIT falling to ₹1,220.11 crore and operating profit margins declining to 3.82%. Asset quality remained strong, with gross NPAs at 2.08% and net NPAs at 0.45%, underscoring prudent credit management.

On the stock front, Canara Bank closed at Rs.147.40, down 1.93% from the previous day, with intraday volatility between Rs.148.95 and Rs.160.80. Technical momentum shifted from bullish to mildly bullish, with weekly MACD and KST indicators turning mildly bearish, while monthly indicators remained positive. The stock traded near its 52-week high intraday but faced profit-taking pressure. The Mojo Grade was downgraded from Buy to Hold, with a current Mojo Score of 62.0, reflecting a more cautious stance amid mixed financial and technical signals.

Daily Price Performance vs Sensex

Key Takeaways

Positive Signals: Canara Bank demonstrated strong long-term fundamentals with a 63.55% one-year return and robust asset quality metrics, including a gross NPA ratio of 2.08%. The stock traded above key moving averages for most of the week, reflecting underlying strength. Institutional holdings increased, and the recent upgrade to a Buy rating by MarketsMOJO on 28 January highlighted improving fundamentals and technicals.

Cautionary Signals: The week ended with a 2.87% decline in stock price, underperforming the Sensex’s 1.62% gain. Intraday volatility on 29 January saw a sharp correction after hitting a 52-week high, with technical indicators shifting from bullish to mildly bullish or neutral. Delivery volumes declined amid rising derivatives open interest, suggesting speculative positioning rather than sustained accumulation. The flat quarterly financial trend and contraction in operating profitability add to near-term uncertainties.

Conclusion

Canara Bank’s week was marked by a complex interplay of strong long-term fundamentals and short-term volatility. The stock’s ability to reach a new 52-week high amid rising derivatives activity underscores robust market interest, yet the subsequent sharp correction and mixed technical signals highlight caution. The flat quarterly results and downgrade in mojo grade to Hold reflect operational challenges despite solid asset quality. Investors should monitor technical indicators and volume trends closely, balancing the bank’s resilient fundamentals against near-term price fluctuations and market sentiment shifts.

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