Bajaj Finance, HDFC, Mahindra Finance: How should you trade these NBFC stocks?

The bulls pushed benchmark stock indices higher for the ninth straight session last week, thanks to strong buying in banking and financial counters. On Thursday, the 30-share pack BSE Sensex gained 38.23 points, or 0.06 per cent, to settle at 60,431.  The NSE Nifty added 15.60 points, or 0.09 per cent, to close at 17,828.

Financial stocks including HDFC, Bajaj Finance and Mahindra & Mahindra Financial Services (Mahindra Finance) were in the limelight on Thursday. Here is what Mileen Vasudeo, Senior Technical Analyst at Arihant Capital Markets has to say on these stocks ahead of Monday's trading session:

Bajaj Finance | Buy | Target Price: Rs 6,300-6,500 | Stop Loss: Rs 5,700
Bajaj Finance, after a prolonged downtrend, is making a higher high formation on the daily chart, which is a sign of trend reversal. At present, the stock has poor relative strength, which means the stock is underperforming the benchmark indices. However, the momentum indicator viz the MACD is positively poised. It suggests that the momentum on the upside is likely to continue.  Hence, one can buy the stock with a stop loss of Rs 5,700 for a target of Rs 6,300-6,500 levels in the couple of weeks.
 
HDFC | Buy | Target Price: Rs 3,000-3,150 | Stop Loss: Rs 2,690
HDFC has given four months’ lateral consolidation breakout at Rs 2,780 level. The stock is clearly outperforming the benchmark indices. Further, positions of both momentum indicators viz RSI and MACD are positively poised. This suggests that momentum on the upside is likely to continue. Hence, one can buy the stock with a stop loss of Rs 2,690 for a target of Rs 3,000-3,150 levels in the next couple of months.
 
Mahindra & Mahindra Financial Services | Buy | Target Price: Rs 297-324 | Stop Loss: Rs 240

Mahindra Finance reclaimed the 50-day SMA of Rs 245 on April 6, 2023 with higher volumes and has started showing strength on the daily chart.  The stock has higher relative strength and is outperforming the benchmark indices. The momentum indicator viz the MACD is positively poised. Combining all the above parameters, it is evident that momentum on the upside is likely to continue. Hence, one can buy at current prices with a stop loss of Rs 240 for a target of Rs 297-324 levels in the next couple of weeks.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today.)

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