Anand James sees Muthoot Finance shares rallying to Rs 3,000 after breakout on Q1 beat

Anand James, Chief Market Strategist at Geojit Investments, expects Muthoot Finance to climb to Rs 3,000 after a strong Q1 performance and a breakout from its two-month sideways trend. He advises keeping downside markers at Rs 2,675 or Rs 2,635, aligning with the 20-day SMA, to manage risk while riding the uptrend.

Edited excerpts from a chat:

Nifty managed to break a 6-week losing streak to end over 1% higher. How would you trade the market on Monday when the market would react to the outcome of the Alaska meeting?

Directional moving indicators are still in favour of more downsides with 24000 and 23560 as potential downside supports attracting prices lower. That said, the last week saw several attempts to push higher, giving us reversal hopes. Apparently, none of those moves managed to successfully close above the 24670-720 band, the near-term congestion resistance; they did manage to bring the parabolic sar under the price, lending a positive bias. More importantly, the broader market has shown even better signs of resilience, having had the highest number of Nifty 500 constituents closing above the 10-day SMA since 24th July. Incidentally, Nifty had tumbled from the 25200 region on that day. This would be the objective we would be aiming for, should we clear above 24720 on Monday.

Nifty PSU Bank index outperformed Nifty Bank by a wide margin. Will this preference for PSU banks sustain in the week ahead as well?

The recent rally in the index was largely fueled by strong performance from SBI, even as private sector banks lagged. Notably, the PSU Bank index has broken above both daily and weekly Supertrend indicators, forming a bullish Marubozu candle on the weekly chart. This breakout above a declining trendline suggests a positive momentum shift.

However, the index is nearing a key resistance at the 61.8% Fibonacci retracement level of 7090, which could trigger some profit booking in the short term. Derivative data also hints at caution, with 43% of near out-of-the-money call options showing signs of short buildup—indicating limited bullish sentiment among traders for now.

Despite this, the broader outlook remains optimistic. The average RSI of major PSU bank stocks hovers around 53, suggesting fair valuations and room for further upside. While a pullback near resistance is possible, bulls are expected to regroup and push the index higher in the coming sessions.

HBL Engineering shares were among the top gainers in the Nifty 500 pack and ended about 29% higher. Is there more steam left in the rally?

A new record peak makes for an exciting case of joining the rally with eyes on Rs 858 as the nearest objective. However, four days of pushing above the upper Bollinger band certainly call for some speed bumps ahead. New entrants should see if their risk appetite allows for a stop loss near Rs 730 or Rs 680.

Muthoot Finance shares also ended 10% up on Friday following target price upgrades on Q1 beat. What would be your target on the stock?

We are eyeing Rs 3,000 on the stock, having broken out from the sideways band that has been prevailing since early June. Our downside marker would be near Rs 2,675 or Rs 2,635, which is near its 20-day SMA.

Give us your top ideas for the week ahead.

CHALET (CMP: 933)

View: Buy
Target: 955
Stoploss: 918

The stock has rebounded from a key horizontal support near 850, which also aligns with the 200-day Simple Moving Average (DSMA), suggesting a potential trend reversal. Technically, the MACD has crossed above its signal line, and the RSI has moved above its 14-day average—both indicators pointing to strengthening bullish momentum.

Additionally, the stock has recently broken above the 20-day and 50-day SMAs, reinforcing the positive outlook. Based on this setup, the stock is expected to move toward the 955 level in the near term. Traders holding long positions should consider placing a stop-loss below 918 to safeguard against downside risk.

ASTERDM (CMP: 605)

View: Buy
Target: 622 - 650
Stoploss: 584

The stock has recently bounced back from a key horizontal support level at 574, which also coincides with the 200-day Simple Moving Average (DSMA), signalling a potential reversal. On the daily chart, the MACD has crossed above its signal line, and the stock has also moved above the 20-day and 50-day DSMAs—strengthening the bullish outlook.

These technical developments suggest upward momentum, and we anticipate the stock to move toward the 622 and 650 levels over the next few weeks. Long positions should be safeguarded with a stop-loss placed below 584 to manage downside risk.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)