The outlook for the stock of Dewan Housing Finance Corporation (DHFL) is bullish. After moving in a sideways range for more than a week, the stock has risen sharply breaking above this range on Monday.
The stock opened with a gap-up and surged 6.2 per cent on Monday. This marks the resumption of the short-term uptrend that has been in place since the August low of ₹391.8. Key short-term supports are at ₹587 and ₹578. Dips to these levels may find fresh buyers coming into the stock. A rally to ₹630 is likely in the coming days. Further break above ₹630 will increase the likelihood of the stock extending its up move to ₹637 and ₹642.
Short-term traders can go long. Stop-loss can be placed at ₹585 for the target of ₹635. Revise the stop-loss higher to ₹615 as soon as the stock moves up to ₹620. The outlook for the stock will turn negative only if the stock declines below ₹578 decisively. But such a sharp fall looks unlikely at the moment.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)