Technical Analysis

L&T Finance Holdings (₹102.8): Buy

Akhil Nallamuthu BL Research Bureau | Updated on November 27, 2019 Published on November 27, 2019

The recovery in the stock of L&T Finance seems to be gaining steam of late. On Monday, the stock closed at ₹104.2, above the critical level of ₹100. This is the highest close in last three months on a daily basis.

The downtrend, that began in April from a high of ₹155.9, dragged the stock to register a new 52-week low of ₹78.6 in early October. Thus, the stock lost 50 per cent within a span of seven months.

Though the stock has been attempting to recover, failed to move beyond the critical number of ₹100 and started to consolidate. Since the beginning of November, the stock was fluctuating in a sideways trend between ₹94 and ₹100. The recovery took a significant step forward as the stock cruised past ₹100 this week, increasing the chance for further appreciation.

The daily relative strength index is showing an uptick following the breakout. Importantly, the 21-DMA has crossed above the 50-DMA, potentially indicating a reversal in medium-term trend to bullish. Hence, investors can initiate fresh long positions on declines with stop-loss at ₹96. The target on the upside is at ₹115.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading.

Published on November 27, 2019
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