M&M Financial Services surge over 11 per cent; gives neckline breakout

The stock of Mahindra & Mahindra Financial Services, after registering a high of Rs 403.30 on February 11, 2020, had entered into a downtrend and recorded series of lower high and low.

As on April 07, 2020, the stock had formed a swing low of Rs 128.30, where it had formed a reversal bullish pin bar candlestick pattern and thereafter, the stock prices rebounded to touch the level of Rs 191.80.

However, the stock failed to hold on to the higher levels and attempted to return to the previous trend but the bears were not able to push prices much lower and thus, the stock registered an almost identical bottom as on May 22, 2020. This resulted in the formation of Adam & Adam double bottom pattern.

On Tuesday, the stock has given a neckline breakout of double bottom formation, backed by strong volumes. Additionally, the stock formed a sizeable bullish candle on the breakout day, which adds strength to the breakout. 

The short-term trend of the stock is bullish as it is trading above its weekly pivot and above the short-term moving averages, i.e. 20-day EMA and 50-day EMA. The daily RSI closed above the prior swing high in a bullish zone. It is also making higher highs and higher lows. The indicator is exactly moving along with the price. 

Going ahead, the stock has strong support in the zone of Rs 182-Rs 180, while on the higher side; a major resistance is placed in the zone of Rs 230-Rs 233 level.

On Tuesday, the stock of Mahindra & Mahindra Financial Services closed at Rs 204.15 per share, surged by 11.65 per cent. The stock opened at Rs 183.20 per share and hit an intraday high of Rs 208.20 and a low of Rs 182.55 per share on NSE.