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A 27% gain since our first call

Posted: 01/29/2013 - 1:36 pm

It was only yesterday that we made the case for an 8% rally in Emirates NBD. Well, it did not take long for the stock to generate these returns and more (read: Remember the banks? We are still playing them).

On January 17, we said that Emirates NBD attained our second target for an 11.2% gain and we said we are still playing the upside potential in the stock and the sector in general. This view was reiterated yesterday as we anticipated a rally to 3.70.

Today, we saw the share price surpass our target and hit a high of 3.85 on heavy volume. The move fuels the positive momentum in the share price and hints at further upside.

As highlighted by the chart, a break above 3.90 will increase the probability of a rally to 4.30. That said, our strategy would call for a partial exit at 3.90 given the tendency for the stock to turn volatile after sharp runs. The remaining position must be held with a protective stop at 3.60.

click to enlarge

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