The share price of Gruh Finance, a subsidiary of HDFC Limited, has been in an uptrend for a while now. After touching a high of Rs.229.90 on July 16, the stock has been in a downward corrective phase. From the daily chart of Gruh Finance featured below, it is evident that the stock has been in a “gentle” downtrend since July 16. The pronounced “upper shadows” on the way down indicates that the pockets of selling pressure has been absorbed during the fall.
The sharp rally today, on the back of strong volumes, suggests that the next leg of the uptrend in Gruh Finance is underway. We expect the stock to soon reach the primary target of Rs.230. Let’s talk of higher targets once the price clears Rs.230. We would abandon our positive view if the stock falls below Rs.182. For trading purposes, the stop loss may be placed at Rs.190.
(The view featured here is based on Technical Analysis of historical stock price action. Please read the Disclaimer)