Manappuram Finance Ltd

Buy - MANAPPURAM

CMP (NSE) 15:54, 27 Sep

172.90 -0.1-0.06%

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Sector

Financial Services

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Reco. Price

108

Period

6-9 Months

Target Price

139

upside

28.7%

Stop Loss

90

Last updated on

11 Sep, 2017

Multiyear Ascending Triangle Breakout
 
Manappuram Finance Limited (Manappuram) was trapped between two trendlines - one was the “Upward Sloping Trendline” and the other was the “Horizontal Resistance Line” that represents boundaries of the “Ascending Triangle Pattern”.
 
The stock has been oscillating within the ascending triangle pattern for almost 12 months during which the stock held on to its upward sloping support line since December 2016. On the upside, Manappuram attempted to breach the Horizontal Resistance trendline in July 2017, but the attempt proved futile.
 
Finally, after going through a reliable phase of consolidation and witnessing gradual upswings, Manappuram has broken out from a “Multi-Year Ascending Triangle Pattern” on the weekly chart.
 
The stock has recently hit a fresh life-time high. Technical indicators and oscillators also provide clearer picture on potential up-moves, pointing to a possible strong appreciation in the medium term. The breach has been accompanied with strong up-tick in traded volumes, adding credence to the breakout.
 
If the breakout plays out the way it should, then projection of the structure indicates that Manappuram has a potential target of Rs 139 translating into 28.7% upside. The breakout will stand void if Rs 90 is broken on weekly closing basis.

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