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Investors with a short-term horizon can buy the stock of L&T Finance Holdings at current levels. The stock gained 13 per cent accompanied by extraordinary volume on Thursday, conclusively breaking above a vital resistance as well as the 21-day moving average at around ₹57. Following a sharp reversal from February high of ₹134, the stock registered a multi-year low at ₹46 in mid-March. Subsequently, the stock reversed direction from the oversold territory and began to trend upwards. Since then, the stock has been in a near-term uptrend.
There has been an increase in daily volume since early March. Reinforcing the bullish momentum, the stock has surpassed a key resistance and 21-DMA on Thursday. The daily RSI has entered the neutral region from the bearish zone and the weekly RSI is recovering from the oversold territory. Further, the daily price rate of change indicator is hovering in the positive terrain implying buying interest.
Although the short-term trend is down but the near-term outlook is bullish for the stock. Taking a contrarian stance, the stock has potential to trend upwards and reach the price targets of ₹64 and ₹66 in the forthcoming trading sessions. Traders can buy the stock with a stop-loss at ₹59.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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