Mahindra May Pull Brakes
Rationale :
The attached daily timeframe chart of Mahindra & Mahindra Ltd has been steadily moving up over the last many weeks.
We observe a formation of positive sequence of higher tops and bottoms in the last few months and the stock price is now moving up, to form a new higher top of the sequence.
The gradual upmove of the last 4-5 months seems to have completed, as the stock price has started to show some weakness from the highs during this week.
Presently, the stock has been consolidating near upward channel resistance levels at Rs 1450-1455 and also near 161.8% retracement levels ( Rs 1167 ) of prior down move from Rs 1402.20 ( 11th May, 2017) to Rs 1300 ( 23rd May, 2017). The said levels also roughly coincide with the previous top of Rs 1454.75 (04th October 2016 ), thereby giving much strength to the overhead levels.
Technical indicators are likely to be overbought territory as of now, Slow stochastic( 80.31 ) seems turning downward, 14-RSI is at 78 and extremely overbought.
On a positive note :
The above mentioned stock is trading above all important short, medium and longer term simple moving averages.
According to an important trend indicator (GMMA) short term averages (blue shaded lines) are well above long term averages (green shaded lines). The above said indicator is used in technical analysis to identify changing trends, A bullish trend is present when the short-term moving averages are above the long-term averages.
MACD: 26.2 and Signal Line: 22.6. According to MACD analysis, M&M is technically strong.
Daily swing indicator +DI is dominating and ADX is 30.5 which means the stock is in a strong up-trend.
Keeping in mind, the above technical evidences we expect Mahindra & Mahindra to correct from current levels in near term to Rs 1387-1380, break of which may push the prices further down till Rs 1320-1300 (near lower channel levels), hence advise investors to book profits and wait for lower levels for re-entry.
On the contrary, any close at or above Rs 1500 would open the gates for fresh next leg of upmove towards Rs 1570-1685 / Higher.
Hence, we advise for fresh entries only above Rs 1500-1508 and also buy on dips strategy (price range 1300-1320) should be adopted for this particular stock.
The attached daily timeframe chart of Mahindra & Mahindra Ltd has been steadily moving up over the last many weeks.
We observe a formation of positive sequence of higher tops and bottoms in the last few months and the stock price is now moving up, to form a new higher top of the sequence.
The gradual upmove of the last 4-5 months seems to have completed, as the stock price has started to show some weakness from the highs during this week.
Presently, the stock has been consolidating near upward channel resistance levels at Rs 1450-1455 and also near 161.8% retracement levels ( Rs 1167 ) of prior down move from Rs 1402.20 ( 11th May, 2017) to Rs 1300 ( 23rd May, 2017). The said levels also roughly coincide with the previous top of Rs 1454.75 (04th October 2016 ), thereby giving much strength to the overhead levels.
Technical indicators are likely to be overbought territory as of now, Slow stochastic( 80.31 ) seems turning downward, 14-RSI is at 78 and extremely overbought.
On a positive note :
The above mentioned stock is trading above all important short, medium and longer term simple moving averages.
According to an important trend indicator (GMMA) short term averages (blue shaded lines) are well above long term averages (green shaded lines). The above said indicator is used in technical analysis to identify changing trends, A bullish trend is present when the short-term moving averages are above the long-term averages.
MACD: 26.2 and Signal Line: 22.6. According to MACD analysis, M&M is technically strong.
Daily swing indicator +DI is dominating and ADX is 30.5 which means the stock is in a strong up-trend.
Keeping in mind, the above technical evidences we expect Mahindra & Mahindra to correct from current levels in near term to Rs 1387-1380, break of which may push the prices further down till Rs 1320-1300 (near lower channel levels), hence advise investors to book profits and wait for lower levels for re-entry.
On the contrary, any close at or above Rs 1500 would open the gates for fresh next leg of upmove towards Rs 1570-1685 / Higher.
Hence, we advise for fresh entries only above Rs 1500-1508 and also buy on dips strategy (price range 1300-1320) should be adopted for this particular stock.
Penafian
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