The Hindu Business Line : M&M Financial Services (Rs 230.7): Sell

We recommend a sell in Mahindra and Mahindra Financial Services stock from a short-term perspective. It is apparent from the charts the stock has been on a medium-term downtrend from its June high of Rs 294 (a 52-week high). We notice formation of a descending triangle pattern since June peak with lower horizontal line at Rs 237. This is a bearish reversal pattern. While trending down, the stock breached its 21- and 50- day moving average during late July and is trading well below these averages. Moreover, on August 11, the stock conclusively broke through the triangle pattern, reinforcing the down trend. The daily relative strength index (RSI) has entered the bearish zone from the neutral region and weekly RSI is declining in the neutral region. We are bearish on the stock from a short-term horizon. We anticipate the stock to decline until it hits our price target of Rs 207. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 241.

Yoganand D

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