M&M, Maruti look bullish after Positive Island Reversal pattern

MUMBAI: Auto majors Mahindra & Mahindra and Maruti Suzuki were among the top gainers on the Sensex as investors continued to buy the stocks after they formed Positive Island Reversal pattern.

A K Prabhakar, Senior Vice President - Equity Research, Anand Rathi, is of the view that the pattern is an indicator of bullish trend and the duo are likely to continue with their upward momentum in the near to medium term.

Following are his stock views on M&M and Maruti Suzuki:

Mahindra & Mahindra:

M&M made a Pole & FLAG Pattern as seen in the chart. It gapped-down (Rs 971.05-968.15) on 11th June and today gapped-up (Rs 954.9-959) which is Irregular Positive Island Reversal.

The stock hit all time high of Rs 976 in December, 2012 post which it made valiant attempts to break through the all time high. The stock then formed an almost double-top post which it corrected to a low of Rs 808.

The stock then made a high of Rs 974.80 and the possibility of the stock breaching all time high is on the cards. If that happens then target of Rs 1,250 is possible. The stock is trading above all major moving averages and can rally significantly if current levels are held.

The stock ended at Rs 989.40, up 4.43 per cent, on the BSE. It touched a high of Rs 999.90 and a low of Rs 960.80 in trade today.


Maruti Suzuki:

Maruti formed a Positive Island reversal along with Nifty. The stock gapped-down (Rs 1,461.9-1,461.5) on June 13 while it Gapped-up (Rs 1461.5-1471.65) on June 14, almost making a major reversal on cards.

The stock after making all time high of Rs 1,777 retraced 68 per cent of the move from low of Rs 1,260 which is high & low of 2013. Now the stock looks very good to cross all time high of Rs 1,777 and looks set to hit the target of Rs 1,865 and Rs 2,000 in next 6months.

The stock ended at Rs 1,535.60, up 1.36 per cent, on the BSE. It touched a high of Rs 1,551.35 and a low of Rs 1,505 in trade today.

Disclaimer: The stock views and recommendations are the brokerage's view. Please consult your financial advisor before taking any position in the stocks mentioned.