Muthoot, Manappuram Fin: Charts show up to 12% upside in gold financiers

Muthoot Finance is headed towards Rs 1,700 levels

Shares of gold financiers traded up to 8 per cent higher at the bourses on Thursday, as gold hovered near five-month price peak. Muthoot Finance rallied 8 per cent to hit a new high of Rs 1,533 on the BSE in intra-day trade after the firm reported a strong set of numbers for the quarter ended March (Q4FY21) with healthy business growth and improved asset quality.

Among other individual stocks, CSB Bank rose 3 per cent and Manappuram Finance gained 1.6 per cent, in intra-day deals. In comparison, the benchmark S&P BSE Sensex traded 0.38 per cent higher at 52,050 levels, at 11:30 AM.

In the global market, gold slipped below a near five-month price peak hit earlier in Tuesday’s session, as robust US manufacturing data and higher Treasury yields dented its appeal. Spot gold was 0.3 per cent lower at $1,902.05 per ounce at 1:41 p.m. EDT (1741 GMT), after touching its highest since January 8 at $1,916.40.

According to Bhavik Patel, Senior Commodity/Currency Research Analyst at Tradebulls Securities, "Gold’s next move is expected on Friday when the US Labor Department releases its non-farm payrolls report for May. A disappointing non-farm payroll could push gold prices further upside while better than expected number could see US dollar and yields pivot higher. Hedge funds and investors have covered their short positions and have added long as speculative interest in gold has risen for four consecutive weeks." READ MORE

Here's how some gold financiers look on the charts

Muthoot Finance Limited (MUTHOOTFIN)

Likely target: Rs 1,600 and Rs 1,700

Upside potential: 5.50% and 12%

The counter has broken out of a year-long consolidation in the range of Rs 1,400 to Rs 1,000 levels. This breakout hints at a rally towards Rs 1,600 and Rs 1,700 levels in coming sessions, as per the daily and weekly charts. The volumes have seen a sharp surge on the breakout mark, suggesting higher interest of market participants for the stock.  CLICK HERE FOR THE CHART
 
Manappuram Finance Limited (MANAPPURAM)

Likely target: Rs 180

Upside potential: 8.50%

The breakout of “Inverse Head and Shoulder” may result in an upside towards Rs 180, which is the next hurdle. The upside bias is intact until the counter defends the support of Rs 160 levels on the closing basis. The Moving Average Convergence Divergence (MACD) has conquered the zero line, suggesting an upward direction for the upcoming sessions, as per the daily chart.   CLICK HERE FOR THE CHART
 
 
CSB Bank Limited (CSBBANK)

Likely target: Rs 340

Upside potential: 5%

After breaking out above Rs 280 levels, the counter has seen a selling pressure around Rs 340 levels. Nevertheless, until the counter defends the support of 300 levels, the upside reversal may attempt to conquer the hurdle of Rs 340, as per the daily chart.  CLICK HERE FOR THE CHART