Axis Bank, Max Fin: How to trade these stocks after a tweak in the deal

Max Financial may see a follow-up buying, eventually resulting in an optimistic medium term outlook.

Shares of Max Financial Services advanced around 15 per cent to hit a 52-week high of Rs 630.9 on the BSE on Tuesday, a day after the company said that Axis Bank has reduced the size of the stake that it plans to buy in Max Life Insurance to 17 per cent from 29 per cent.

Axis Bank's move comes months after media reports said the deal, announced in April, ran into a regulatory roadblock over certain clauses in the agreement. READ MORE

Axis Bank stock, on the other hand, was trading nearly 2 per cent higher at Rs 454.45. 

Below is a look at what charts indicate for these two stocks. 

Axis Bank Ltd (AXISBANK): The counter is holding the support of 50-day moving average (DMA), as per the daily chart. This scenario is accompanied by the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), which have made positive crossovers, indicating an upward bias. The 50-DMA is placed at Rs 434, which is the support for a rally in the direction of Rs 480 levels, as per the daily chart. One can expect a surge in volume after the price climbs above Rs 257 levels - a minor resistance level. CLICK HERE FOR THE CHART
 
Max Financial Services Ltd (MFSL): This counter is in uptrend with a “Golden Cross” formation on the daily chart. Now, a strong opening with price scaling higher highs on Tuesday (a gap up), the trend is set towards Rs 650 levels. The MACD has crossed the zero line upward suggesting that the underneath strength will stay on an upward direction. The medium term outlook stays bullish, till the counter trades above the support of Rs 580 levels. CLICK HERE FOR THE CHART