Bajaj Finance may hit Rs 3000 post breakout: Analysts

MUMBAI: Bajaj Finance, which hit a fresh high of Rs 2,819.65 Wednesday, has broken out of a technical pattern called pole and flag, giving traders scope of earning further 7 per cent returns over the short term, analysts said.

The stock spurted from a low of Rs 2,358 on July 19 to a high of Rs 2,745 a day later. It rose further a session later (July 23) to Rs 2,797. These three sessions, which clocked higher highs, formed the pole. Over the next 11 sessions through August 7 it consolidated in a 117-point range of Rs 2,655-2,772. This formed the flag.

Finally, on August 8, it made a fresh high of Rs 2,819.65, breaking out of the flag and pole pattern. “In the recent past whenever this stock broke out of the pole and flag pattern, momentum has driven it to fresh highs and this is what will happen after Wednesday’s breakout,” said Chandan Taparia, AVP, Motilal Oswal Securities.

Bajaj Finance options expiring on August 30 reveal that highest call open interest (OI) to be at the 3,000 strike price. This is nearly 7 per cent away from Wednesday’s close of Rs 2,810 and is potentially the level Bajaj Finance could test in the current series.

Bajaj Fin snip 1

The support would kick in at Rs 2,655, the low of the eleven sessions from July 24 – August 7. “The stock is on a roll and could well test Rs 3,000 having broken out from the flag and pole pattern,” said Rajesh Palviya, technical head at Axis Securities.

Out of 23 analysts tracking Bajaj Finance, 13 have a ‘buy’ rating on the stock, eight have recommended a ‘hold’ and 2 advise selling, cites Bloomberg.

The stock has rallied 58 per cent year-todate against the Nifty’s 9 per cent rise.

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