On the daily charts, the stock failed to breakout from the resistance of Rs 1,366 recorded on 1 November 2022, and on the downside, the stock found support above Rs 1,200. The stock closed at Rs 1,352 on 2 February 2023.
The stock which is part of the automobile industry hit a record high of Rs 1,389 on 1 February 2023 but it failed to hold on to the gains. The stock is up nearly 6% in a week and more than 10% in a month.
Short-term traders can look to buy the stock now or on dips for a possible target above Rs 1,400 in the next 3-4 weeks, suggest experts.
M&M stock is an uptrend, and the supports are also shifting higher which suggests momentum is intact. The stock is moving in line with the traction seen in the auto index. The Nifty50 rose over 2% in a week and over 5% in a month.
The Relative Strength Index (RSI) is at 61.7. RSI below 30 is considered oversold and above 70 is considered overbought, Trendlyne data showed. MACD is above its center and signal line, this is a bullish indicator.
On the price front, the stock price is trading above most of the short- and long-term moving averages of 5,10,30,50,100 and 200-DMA which is a positive sign for the bulls.
“The M&M stock is in an overall uptrend on a monthly scale and trading near its lifetime high territory. It has formed a strong base near Rs 1,250 zones and retested multiple times on a weekly scale which suggests a major demand zone,” Arpit Beriwal, Analyst, Equity Derivatives & Technicals, MOFSL, said.
“It is forming higher highs from the past six weeks and supports are gradually shifting higher. It has given a range breakout on a daily scale and is holding well above its 50 DEMA,” he said.
Relative Strength Index (RSI) has given a breakout on the weekly chart which implies momentum is likely to continue going ahead.
Overall, good resilience is seen in auto stocks despite market volatility and looking at the overall chart structure on a weekly scale we expect the stock to move higher.
“Thus, we recommend to buy the stock at current levels with keeping a stop loss below Rs 1,290 levels on a closing basis for an upside move towards Rs 1,450 zones,” recommends Beriwal.
(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. These do not represent the views of Economic Times)
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