Technical view on Bajaj Finserv

The stock of Bajaj Finserv Limited registered its all-time high of Rs 9,950 in early February 2020 and thereafter, the stock plummeted over 58 per cent in the next 9 weeks, making a low of Rs 4,160.25.

However, the stock has formed a strong base in the zone of Rs 4,160-Rs 3,985 and thereafter, witnessed a pullback rally. The pullback rally was nearly 68 per cent from the low of Rs 3,985.30 level.

The pullback rally is halted in between the 38.2 per cent and 50 per cent retracement level of its prior downward move (Rs 9,827.55-Rs 3,985.30) and coincides with the 200-day simple moving average. The stock has underperformed the frontline indices in the current leg of the upward rally. Also, the stock relatively underperformed Nifty 500 with a decent margin. The relative strength comparison with Nifty 500 and Nifty 50 is making lower lows since July 2020.

Further, the stock is displaying a bearish trend as it is trading below its short and long-term moving averages, i.e. 20-week EMA, 50-week EMA, 100-week EMA & 200-week EMA level. The daily chart shows that it has been continuously trading below its 200-day EMA level from March 2020.

Talking about the indicators, the leading indicator i.e. the 14-period weekly RSI is currently quoting at 40.98 and it is trading below its 9-week average. The RSI has not been able to cross the 60 mark since February 2020. The weekly MACD stays bearish as it is trading below its zero line and the histogram is suggesting a pick-up in the downside momentum.

Going ahead, the stock has got strong support in the zone of Rs 5,430-Rs 5,400, while, on the higher side, major resistance is placed in the zone of Rs 6,100-Rs 6,170 level.