Short-term traders can look to buy the stock as long as it holds above 935 for a possible target above 1100 levels in the next 3-4 weeks, suggest experts.
MFSL stock hit a 52-week high of Rs 988 on 21st November 2023. It gave a breakout from the Flat pattern on the weekly charts which has opened room for the stock to head higher.
A bullish flag is usually formed in stocks with strong uptrends and is considered a continuation pattern. The pole is formed from the vertical rise seen in the stock price while the flag resembles the period of consolidation.
The MFSL stock witnessed a steady rise after hitting a low of 600-630 in April, and May 2023 period to hit a high above 950 levels in September 2023 on the daily charts. The stock underwent a period of brief consolidation since then.
“Max Financial Services stock has seen a decent 60% run up from the lows of 630 and is currently trading at 973. A healthy consolidation has happened in the zone of a mere 6% range of 934 – 880, with a fresh breakout recently seen. This is a Short-term Continuation – Flag Pattern,” Lovelesh Sharma, CMT | CFTe, Founder, MarketFeds Analytics LLP, said.
“We expect the upside momentum in stock will continue, given the turn-in ADX, which has been rising for the last three days, indicates that the current breakout point to be a critical Trough/ Support as well,” he said.
AgenciesIn terms of price action, the stock is trading well above most of the crucial short- and long-term moving averages such as 5,10,30,50,100 and 200-DMA on the daily charts which is a positive sign for the bulls.
The daily Relative Strength Index (RSI) is at 62.9. RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed. The daily MACD is above its center and signal Line, this is a bullish indicator.
“Max still has a lot of upside potential, and the target, as per the measured rule, combined with price action, is seen in the zone of 1100 -1120 in the next 3 to 4 weeks,” recommended Sharma.
“On the downside, we will remain a buyer as long as 935 is protected on a closing basis. The risk from current levels is around 3.5%, while the upside is measured at 14%+, making it a high probability and a lucrative setup,” he added.
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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)