Buy Muthoot Finance, target Rs 1145: Shitij Gandhi

Shitij Gandhi

Muthoot Capital Services Limited: Buy| Target: Rs 1,145| Stop Loss: Rs 945| Return 12%

Muthoot Finance has been trading higher since the beginning of the year with the formation of higher highs and higher bottom pattern on the daily charts.

In the recent weeks, the stock has tested Rs 1,129 levels after witnessing a breakout above Rs 1,000 levels. However, since then, consolidation in prices has held the stock to trade in a thin range of Rs 1,050-1,100 levels.

Movement in a narrow band led to the formation of rectangle pattern which is generally traded as a continuation pattern. The positive divergence on secondary indicators like RSI and stochastic are pointing towards next up move in prices moving forward.

Traders can accumulate the stock in a range of Rs 1,020-1,050 for the target of Rs 1,145 and a stop loss below Rs 945.

Disclaimer: The author is Senior Research Analyst, SMC Global Securities Ltd. The views and investment tips expressed by investment experts on moneycontrol.com are his own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.