Chola Fin, IDFC: 5 NBFC stocks to invest for short-to-medium term gain

Shares of Manappuram Finance and Cholamandalam Investment and Finance Company will be in spotlight after the former reached a new 52-week high and latter sets a new historic peak.

Major Non-Banking Financial Company (NBFC) shares could offer significant gains from a short-to-medium term perspective, as their present formations on technical charts illustrate a long-term upside. 

Shares of Cholamandalam Investment and Finance Company, IDFC, L&T Finance Holdings, Manappuram Finance and Mahindra & Mahindra Financial Services have evolved with bullish structures that may delight trading and investing community if they manage to enter at key levels.

For instance, Cholamandalam Investment and Finance Company have hit a new historic peak, whereas IDFC is merely few points short of reaching a new all-time high.

Mahindra & Mahindra Financial Services trades only 4 per cent lower from its respective all-time high. Likewise, L&T Finance Holdings is on the course to hit fresh 52-week high. 

Technically, when stocks reach a new peak or approach a new territory, the underlying momentum begins to form a long-term base in the direction of the trend.

Here’s the technical outlook of these selective NBFC that are ready to scale higher levels:-

Cholamandalam Investment and Finance Company Ltd (CHOLAFIN)

Likely target: Rs 950

Upside potential: 14%

Shares of Cholamandalam Investment and Finance Company have soared 10 per cent since the start of the current month, with every decline witnessing accumulation, as per the daily and weekly charts. 

The sustainability over the crucial mark of Rs 800 has contributed stock in forming a robust base for the following leg of upside. Until this support mark continues to bolster the upward bias, the stock could venture in new territories, reaching Rs 950 levels. CLICK HERE FOR THE CHART

IDFC Limited (IDFC)

Likely target: Rs 100

Upside potential: 21%

Once the shares of IDFC thrive in settling over the hurdle of Rs 82, the breakout shall instill further up move in the trend. With the support of Rs 75, the counter may hit Rs 100 levels, as per the technical charts. 

While the current formation reveals a rectangular pattern, the breakout on the upside; which seems likely considering the weakness being bought, shall endure a long term rally. CLICK HERE FOR THE CHART

Manappuram Finance Limited (MANAPPURAM)

Likely target: Rs 150

Upside potential: 15%

The breakout of the “Inverse Head and Shoulder” has triggered a bullish upside in the stock. Conquering the 200-weekly moving average (WMA) has added to the long bias for coming months. The 200-WMA is placed at Rs 126, which shall act as a supportive indicator for any decline. 

The immediate support exists at Rs 120 and the trend may head in the direction of Rs 150, as per the daily and weekly chart. CLICK HERE FOR THE CHART

L&T Finance Holdings Limited (L&TFH)

Likely target: Rs 100

Upside potential: 10%

The stock has broken out of the “Inverse Head and Shoulder”, right after rising above the overbought territory. This reversal is bolstered by the resilient move of the Relative Strength Index (RSI). 

Now, as long as the stock protects the support of Rs 86, on the closing basis, the positive bias could see a move to Rs 100 level. In addition, the stock has conquered the 50-day moving average and 100-DMA set at Rs 82 and Rs 88 levels, respectively. CLICK HERE FOR THE CHART

Mahindra & Mahindra Financial Services Ltd (M&MFIN)

Likely target: Rs 300

Upside potential: 15%

After taking a sharp dip of 18 per cent since the current 52-week high, the stock managed a V-Shape reversal taking support at the 200-DMA, placed at Rs 220-mark. The stock is heading towards a new historic peak of Rs 300 level, as per the pattern on the daily chart.

The Moving Average Convergence Divergence (MACD) has moved over the zero line, entirely supporting the upward bias. Momentum seems to favor the rising trend, as per the pattern. CLICK HERE FOR THE CHART