Bajaj twins need to sustain these key levels to prevent extended selloff

The broader trend in Bajaj Finance and Bajaj Finserv stocks has turned weak and if both these stocks fail to rebound overcoming key levels, the sell-off could intensify.

Bajaj Finance reported its strongest-ever loan book growth in the recently concluded December quarter.

Despite this, its share price took a hit and extended losses into Friday’s trade as the assets under management (AUM) growth came below expectations. 
 

Shares of Bajaj Finance slipped over 2 per cent on Friday, after plummeting 7 per cent on Thursday. The sell-off also extended in Bajaj Finserv shares, which fell 1.70 per cent post dipping 5 per cent in yesterday’s session.

Bajaj Finance reported 7.8 million new loans book for the Q3FY23, up 5.4 per cent compare to the previous year. It also saw 3.1 million additions in the new customer franchises. The asset under management (AUM) rose 27 per cent to Rs 2.30 trillion in Q3FY23. 

Meanwhile, Bajaj Finance and Bajaj Finserve have not done well in recent months. Both stocks have been in a major downtrend since August last year, plunging 21 and 12 per cent, respectively. Bajaj Finance shares recorded an all-time high of Rs 7,881 in January last year, while Bajaj Finserv clocked a historic peak of Rs 1,901 in October 2021.

Bajaj Finance and Bajaj Finserve each have a 52-week low at Rs 5,113 and Rs 1,072, logged in the last year. 

Amid the unexpected fall in Bajaj twins, here’s the technical outlook for their upcoming sessions:-

Bajaj Finance Ltd (BAJFINANCE)

Likely target: Rs Rs 5,700 and Rs 5,500

Upside potential:  6% to 10%

Shares of Bajaj Finance were making efforts to surpass the 200-day moving average (DMA) set at Rs 6,633-mark, with positive chart structure however, the deep sell-off on the Thursday knocked-down the upside strength. The trend is gradually shifting in bears favour and if the stock fails to exhibit a smart recovery, the short-to-medium bias could enter in a negative grip. 

If the stock stays beneath Rs 6,300 level, the weakness may push the price action towards Rs 5,700 level, followed by Rs 5,500.

Technical indicators, such as the Relative Strength Index (RSI) has entered the oversold territory suggesting selling pressure to deteriorate going forward, but the Moving Average Convergence Divergence (MACD), which has made a negative crossover signals the momentum to stay in the favour of sellers. CLICK HERE FOR THE CHART

Bajaj Finserv Ltd (BAJAJFINSV)

Likely target: Rs 1,300

Upside potential:  10%

Post breaking out of the trendline resistance in August last year on the weekly chart, Bajaj Finserv shares have first time slipped to the 100-weekly moving average (WMA) support of Rs 1,449. If the stock disappoints to shield this cushion mark, the negative trend may deep dive towards Rs 1,300 levels. The key support is at Rs 1,091-mark, which is its 200-WMA.

To regain its upward trend, the stock now needs to overcome the hurdle of Rs 1,560 and thereafter of Rs 1,650. The trend on the daily chart stares weakness that may accelerate, if the stock fails to rebound quickly. Volumes on the decline have seen elevated moves, reflecting bears to take a hold if the stock continues to remain frail. CLICK HERE FOR THE CHART