Buy M&M with a target of Rs 850: Agarwal

Shubham Agarwal, CMT, AVP - Sr Technical Analyst, Motilal Oswal Securities is of the view that one can buy Mahindra and Mahindra (M&M) with a target of Rs 850.

Agarwal told CNBC-TV18, "In the auto space, M&M has been outperforming the peer companies for past some days. On the long term chart, what we see is that there was a multiple highs which was there at around Rs 740. It was able to sustain above that resistance and now it is consolidating which is calling for a continuation pattern. So, what we expect is that this continuation pattern should get broken out on the upside which can eventually lead the stock to the level of around Rs 850 with a timeframe of around two months on that and a stop loss for the trade can be kept at Rs 710. So, the relative strength chart indicates strength over there so it's a very good possibility that we might see an up swing coming in and once we have a breakout happening above Rs 760 then we'll also see momentum building up on the stock. So, gradually it can be bought upto a level of Rs 740. We are recommending a stop loss at Rs 710 with a target of Rs 850."