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Cholamandalam Investment Technical Analysis #94: Buy | Target Rs 312 | Arijit Banerjee

OUR RECOMMENDATION

CMP#293
IdeaBUY
Buy Range288 – 293
Target312 – 315
StopLoss*280
Duration12 – 15 Trading Sessions
Potential Return^6 – 8%
CMP#IdeaBuy RangeTargetStopLoss*DurationPotential Return^
293BUY288 – 293312 – 31528012 – 15 Trading Sessions6 – 8%

# CMP on Oct 24, 2019
* Maintain recommended StopLoss by daily closing basis.
   Once 1st target hit, reset StopLoss at 303.
^ The returns are calculated based on CMP#

COMPANY OVERVIEW

Cholamandalam Invest and Finance Limited is a non-banking financial company provides commercial vehicle loans, two-wheeler loans, construction equipment loans, home loans, business loans for SME, refinance loans, agricultural loans etc. The company also offers health and general insurances, mutual fund, wealth management, PMS, ETF and SIP services, bonds, Demat and depository participant services. As of March 2019, the company has 911 operational branches throughout India. In Q1FY20 the company’s net income was improved by 24.5% to Rs.2,045 crore and consolidated Net Profit increased by 12% YOY to Rs.315.17 crore.

Stock Data
NSE CodeCHOLAFIN
Sectoral IndexFinancial Services
52W High1003
52W Low322.45
Face Value2
Relative Performance_Cholamandalam vs Nifty Financial Services

TECHNICAL OBSERVATIONS (MONTHLY)

  • On a monthly chart, the stock has been moving with it’s upward rising trend line since last many years and it seems that it could continue with its ongoing move.
  • The current price just holds above the trend line which was tested several times during 2010-2019, thereby making it strong support.
Cholamandalam Invest Monthly Chart
Cholamandalam Invest Monthly Chart

TECHNICAL OBSERVATIONS (DAILY)

  • Technical indicators are currently giving positive signals as the stock trades above the short term (20 days EMA) and medium term (50 days EMA) moving averages.
  • Overall a positive chart and momentum pattern indicating an opportunity for a BUY trade. Advice to Buy this stock as per the levels mentioned above.
Cholamandalam Invest Daily Chart
Cholamandalam Invest Daily Chart

MONEY MANAGEMENT AND TRADING RULES

1)  It’s advisable not to enter/exit beyond the recommended range.
2)  Strictly follow the StopLoss as mentioned. Honour it.
3)  Use trailing StopLoss to retain profits.
4)  Diversify trading capital into our other technical recommendations.
5)  Risk only the money what you can afford to lose. Hedge accordingly.

ANALYST SUMMARY

This research analysis is prepared by Arijit Banerjee, CMT, CFTe. An engineering graduate developed an early interest in Trading since the age of 20. He is a Chartered Market Technician (CMT) accredited by CMT Association USA, the leading global authority of Technical Analysis and also has been honoured by Certified Financial Technician (CFTe) from the International Federation of Technical Analysts (IFTA), USA. His contribution to the market research was recognized by SEBI, the Regulatory Body of Indian financial market and given him the registration number INH300006582 as a Research Analyst. Over the years, he has gained experience in Technical Analysis with a demonstrated history of working in different asset classes. Himself as a trader, he has trained and continues training novice and experienced traders to become successful, confident and profitable in the financial market.

Disclosure

The views expressed herein are based solely on information available publicly/internal data/other sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. The recommendations provided herein is solely for informational purposes and are not intended to be and must not be taken alone as the basis for an investment/trading decision. Trading and investing are subject to market risk and the securities discussed and opinions expressed herein may not be suitable for all investors. To read the full disclosure, please click here.

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