The stock of L&T Finance Holdings rose 4 per cent with above average volume breaching an immediate resistance as well as the 21-DMA at ₹172 on Tuesday. This rally gives an opportunity to buy the stock at current levels for the investors with a short-term perspective. After encountering a key resistance at around ₹210 in late October, the stock started the decline. Since then, the stock has been in a short-term downtrend. However, the stock found support at around ₹160 in early December and changed direction triggered by positive divergence in the daily relative strength index.
The 200-day moving average poised at ₹160 also provided cushion for the stock last week. The stock has been trending upwards over the past four trading sessions back with good volume. The daily as well as weekly RSI charting upwards in the neutral region. After displaying a positive divergence the daily price rate of change indicator has entered the positive territory implying buying interest.
Taking a contrarian stance the short-term outlook is positive for the stock. It can extend its up move and reach the price targets of ₹184.5 and ₹188 in the short term. Buy the stock with a stop-loss at ₹173.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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