Short-term traders can look to sell the stock for a possible target below 1400 levels in the next 1-2 months, suggest experts.
M&M stock, which is also part of the S&P BSE Sensex index hit a record high of Rs 1670 on 18 September 2023, but it failed to hold on to the momentum.
The stock closed at Rs 1454 on 1 November 2023 which translates into a fall of nearly 13% from the recent high.
The automobile stock also made an Evening Star Candlestick pattern on the daily charts which is an indication of a potential trend reversal.
The pattern was formed in September when the stock touched record highs and since then, the stock has fallen by about 13% and further consolidation or profit booking could be on the cards, suggest experts.
Evening Start Pattern consists of 3 candles – a large candle, followed by a small-bodied candle, and a red candle. Evening Star patterns are associated with tops or a potential reversal of the prevailing trend.“M&M stock formed an Evening Star candlestick pattern in September, with the star candle having the highest volume of the pattern; now is the time to sell Mahindra and Mahindra,” Suraj Bathija, Founder & CSO at AlgoBulls, said.
“Although the stock has been attempting to rise, sellers are more powerful at higher levels, which is causing the stock to decline and produce upper wicks,” he said.
Red candles are larger in volume and length than green candles. The weekly RSI has dropped from over 60, indicating a slowing of momentum.
“The stock has also witnessed a breakdown from a head and shoulder pattern on the daily chart. A top-level H&S pattern indicates that the stock has been meeting resistance, implying that sellers are actively looking to book profits,” highlights Bathija.
The lower time frame has already entered a selling zone because the daily RSI is below 40 and the H&S pattern has broken.
Agencies“The stock has additional bearish indicators because the closing price is below both the supertrend and the bottom band of the Bollinger Band,” he said.
“One should aim for 1365 and sell or book profits in M&M at the current market price with a stop loss of 1596,” recommended Bathija.
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(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)