stocks to buy: Chart Check: 80% rally from March 2022 lows, this NBFC stock could hit fresh 52-week high in 1 month
Short term traders who missed the rally can look at buying the stock on dips for a target above Rs 260 in the next 1 month, suggest experts.
The NBFC stock recently gave a breakout above a falling trendline resistance on the daily charts and has also witnessed a bullish engulfing pattern.
A Bullish Engulfing pattern formation has a higher probability of successful change in an ongoing trend. If it is appearing after a phase of downward movement, it is indicative of a possible reversal from bearish to bullish.
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On the price front, the stock price is trading above most of the crucial short and long-term moving averages of 5,10,30,50,100 and 200-DMA which is a positive sign for the bulls.
At this point, financial service stocks are leading the pack in terms of price performance. “Looking at stocks under the finance domain, M&MFin breached the 50 months falling trend line. It is a bullish continuation sign,” Kapil Shah, Technical Analyst, Emkay Global Financial Services and Trainer- FinLearn Academy, said.
On the weekly chart, the stock gave a breakout from 88 weeks consolidation patch. From a pattern perspective, it can be considered as a rounding bottom pattern which is a bullish development.
“On the daily chart, the stock price has intersected at the slope of the rising trend line, it coincides with the role reversal line wherein earlier resistance acted as support. From a candle pattern perspective, at the intersection point, the stock has witnessed the formation of a bullish engulfing pattern,” added Shah.
“It shows the presence of the buyer. As a sing of the bull’s strength, the stock has breached an immediate falling trend line. It is a bullish continuation sign,” highlighted Shah.
“The stock looks good to buy in the range of Rs 235 to Rs 230 level with a stop loss of Rs 220. On the higher side, the stock has an upside potential up to Rs 260 to Rs 265 level. Duration can be of 1 month,” he recommends.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)