On Wednesday, the RBI drew the attention of gold loan financiers asking them to adhere to the Income Tax act, when it comes to cash loans.
Muthoot Finance tumbled 8.8 per cent (Rs 1510); while Manappuram Finance shed 8.3 per cent (Rs 165.15) on the BSE in trades so far.
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Meanwhile, here's a technical check on Muthoot Finance and Manappuram Finance stock for the likely trend ahead.
Support: Rs 1,509; Rs 1,467
With today's sharp fall, Muthoot Finance stock has dipped below its 20-DMA (Daily Moving Average) after a gap of one-and-half month. Key momentum oscillators on the daily chart are clearly negative, indicating likely downward pressure at the stock.
However, support for the stock exists at near levels. In trades so far today, the stock is seen attempting to take support around the 50-DMA at Rs 1,509, below which the next major support stands at Rs 1,467 - the 100-DMA. It seems that the stock may see limited downside in the near-term.
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The broader trend suggests that the overall bias is likely to remain positive as long as the stock holds above Rs 1,385 levels. On the upside, the stock will need to break back above its 20-DMA, which stands at Rs 1,664, in order to resume the uptrend.
Resistance: Rs 179; Rs 183; 191
Manappuram Finance stock has been in a downtrend of late, having declined 20 per cent in the last five trading sessions. The stock is presently trading below its 20-, 50- and 100-DMA at Rs 191, Rs 183 and Rs 179, respectively. On the downside, the stock seems on course to test the 200-DMA at Rs 160 levels. The broader trend suggests that the stock may test Rs 155 on the downside.
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