Technical Check: This underperformer in housing finance company poised to hit fresh 52-week high in 2-3 months

Can Fin Homes Ltd which largely performed in line with the Nifty50 so far in 2021 rose a little over 35 per cent in the last 1 year compared to over 40 per cent upside seen in the Nifty50.

The housing finance company with a market capitalization of more than Rs 8600 cr hit a fresh high of Rs 721.25 on the BSE in October and since then the stock has been consolidating.

It fell by over 14 per cent from the high of Rs 721 to hit a low of Rs 613 on 29 October before bouncing back. The Relative Strength Index (RSI) indicator is gaining strength and has indicated a trend reversal to signal a buy.

Investors are advised to buy now or on dips for a possible target of Rs 750-780 that translates into an upside of about 17 per cent from Rs 667 on the BSE recorded on 15 November.

Can Fin Homes Ltd is one of the top players in the housing finance sector, in the country today. The net profit for the quarter ended September fell by about 4 per cent to Rs 123 cr.

Towards the close of August 2021, the stock has produced a decent rally from the  bottom made near 490 levels to touch the peak level of 722 gaining almost 48% in 2 months.

Thereafter, it has witnessed a short correction to retrace 38% of the rally and has made a higher bottom formation pattern in the daily chart to signify strength and upside potential.

“After consolidating for a short phase maintaining above the significant 50EMA level of 640, currently the stock has produced a positive bullish candle to improve the bias and anticipate for a strong upward rise in the coming days,” Vaishali Parekh Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher Pvt. Ltd said.

“The RSI indicator also after gathering strength near the 50-level zone has indicated a trend reversal to signal a buy and justify our recommendation for a buy,” she said.

Parekh suggests investors to buy and accumulate this midcap stock for an upside target of 750-780 keeping the stop loss near 630 levels for a time frame of 2-3 months and yield decent returns.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)