Muthoot Finance at new high; charts foresee 32% upside for gold loan shares

Muthoot Finance and Manappuram Finance have gained up to 19% thus far in June after RBI eased norms on small-ticket gold loans. Technical charts hint that these stocks can potentially rally 32% more.

Shares of gold loan provider - Muthoot Finance were seen trading at new life-time highs in trades on Thursday, June 19. The stock hit a new all-time high at ₹2,670. In comparison, its competitor - Manappuram Finance stock was seen trading with a marginal loss at ₹264. Manappuram registered its summit at ₹284.90 on the NSE on June 16.  Both stocks - Muthoot Finance and Manappuram Finance have witnessed a sharp rally in the month of June so far, after the Reserve Bank of India (RBI) on June 6 eased norms for small-ticket gold loans. Muthoot Finance stock has surged as much as 19.3 per cent, and Manappuram Finance has rallied 10.7 per cent.  FOLLOW STOCK MARKET UPDATES TODAY LIVE   The RBI increased Loan-to-value (LTV) ratio for loans up to ₹2.5 lakh from 75 per cent to 85 per cent (from 75 per cent), while loans between ₹2.5 – ₹5 lakh were capped at 80 per cent. Owing to the LTV hike lenders will now have the flexibility to give more small-ticket loans. READ MORE  In spite of the solid rally at these counters, technical charts suggest that both Muthoot Finance and Manappuram Finance can log further gains going ahead. Here's a detailed analysis on each of these gold loan financers. 

Muthoot Finance

Current Price: ₹2,645  Upside Potential: 32.3%  Support: ₹2,590; ₹2,550; ₹2,450  Resistance: ₹2,955; ₹3,155; ₹3,290; ₹3,400  Muthoot Finance stock is seen trading on a buoyant note across time-frames. The price-to-moving average action is favourable, with short-term moving averages firmly placed above long-term averages. Chart suggests that the near-term bias for Muthoot Finance is likely to be positive as long as the stock holds above ₹2,450, with near support for the stock anticipated around ₹2,590 and ₹2,550 levels. CLICK HERE FOR THE CHART  On the upside, the stock can potentially target ₹3,500 levels in the course of the next six months or so, suggests the chart. On its way up, Muthoot Finance may face intermediate resistance around ₹2,955, ₹3,155, ₹3,290 and ₹3,400 levels.  ALSO READ |  Buy, sell, hold? Hindustan Zinc stock trades at key support after 2 months 

Manappuram Finance

Current Price: ₹264  Upside Potential: 25%  Support: ₹254; ₹246; ₹237  Resistance: ₹285; ₹297; ₹321  The long-term chart shows that Manappuram Finance is likely to trade with a favourable bias as long as the stock holds above ₹254; below which support for the stock exists at ₹246 and ₹237 levels. CLICK HERE FOR THE CHART  On the upside, the stock needs to break and trade consistently above ₹271 to resume the uptrend. The stock can potentially zoom to ₹330 levels, with interim resistance likely around ₹286, ₹297 and ₹321 levels.