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Trade Spotlight: What should investors do with Muthoot Finance, M&M Financial Services, Edelweiss Financial Services?

Banking and financial stocks, especially from the mid and small-cap spaces, have taken a beating of late.

March 26, 2021 / 07:26 AM IST
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An across-the-board selloff kept the Indian equity market in the red on March 25, dragging the benchmark index Sensex lower by 1.5 percent on the last day of the March F&O series.  The Sensex and Nifty lost 5 percent each in the series.

At close on March 25, the Sensex was down 740 points, or 1.51 percent, at 48,440.12 and Nifty was at 14,324.90, down 225 points, or 1.54 percent. The selling was widespread as the BSE midcap and smallcap indices fell 2.22 percent and 1.85 percent, respectively.

Only four stocks—Dr Reddy's Labs (up 0.74 percent), ICICI Bank (up 0.70 percent), HDFC (up 0.25 percent) and L&T (up 0.21 percent)—ended in the green in the 30-share pack Sensex.

Banking and financial stocks, especially from the mid and small-cap spaces, have been suffering of late. On March 25, shares of Muthoot Finance closed 2.66 percent lower, Mahindra & Mahindra Financial Services slipped 3.57 percent and Edelweiss Financial Services declined 4.95 percent.

Here are expert recommendations on how to trade these stocks today.

Expert: Shrikant Chouhan, Executive Vice president, Equity Technical Research at Kotak Securities

Muthoot Finance

This stock registered a sharp price surge in the recent past but post Rs 1,310 breakout, it failed to sustain at higher levels and due to consistent selling pressure, it has corrected over 11 percent.

However, the medium-term structure of the stock is still positive and is likely to continue in the near-term.

The stock is trading near the 200-day SMA support level and the structure of the charts suggests high chances of a fresh uptrend wave from the current levels.

In the near future, Rs 1,225 would be the immediate hurdle for the stock. If it succeeds to trade above it, we can expect one more uptrend wave up to Rs 1,300. On the other hand, below Rs 1,225, weakness is likely to continue till Rs 1,150.

Mahindra & Mahindra Financial Services

After a strong upward rally from Rs 155 to Rs 220, the stock is hovering in the Rs 190-Rs 220 range.

M&M Finance is trading near an important retracement level and the texture of the chart indicates high chances of a fresh upward rally.

For positional traders, Rs 185 and 50-day SMA should act as important support levels and if the stock manages to trade above the same, we can expect another short-term uptrend wave up to Rs 215.

On the flip side, dismissal of Rs 185 could possibly trigger short-term correction to Rs 180-174.

Edelweiss Financial Services

Post-strong uptrend rally, the stock has formed a lower top formation, which is broadly negative.

This week, so far, the stock corrected more than 12 percent. The long-leg Doji candlestick formation followed by a strong bearish candle on weekly charts suggests further weakness in the near-term.

For the trend following traders, Rs 82 would be the sacrosanct level to watch trading below the same, weakness is expected to continue up to Rs 70-65.

Disclaimer: The views and investment tips expressed by experts on are their own and not those of the website or its management. advises users to check with certified experts before taking any investment decisions.​

Nishant Kumar