Investors with a short-term perspective can consider buying the stock of Muthoot Finance at current levels. The stock surged 6 per cent taking support around ₹190 on Monday. This rally has reinforced the stock’s short-term uptrend that has been in place since taking support from the base level around ₹170 in early August. Moreover, the stock has retraced more than 61.8 per cent fibonacci retracement level of its prior downtrend indicating that the current uptrend is strengthening. The long-term uptrend that started form the August 2013 low of ₹73 has been intact and adds strength.
Indicators such as moving average convergence divergence and price rate of change continue to feature in the positive terrain backing the uptrend. Our short-term outlook is bullish. The stock can extent its rally and reach the price target of ₹211 and then ₹216 in the coming trading sessions. Buy the stock with a stop-loss at ₹198.5.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)