M&M Financial Services (Rs 277)
The stock of M&M Financial Services tumbled 12.7 per cent last week. The stock has been trending down since its life-time high of Rs 355.9 in December 2013. Immediate support is at Rs 272.5 which is likely to be tested in the coming week. If this support holds, a corrective rally to the resistance at Rs 305 is possible. However, the short-term trend in the stock is down and there is less probability of the stock breaching the Rs 305 level.
Fresh selling interest in the market can emerge at this level. The stock may fall to Rs 262 in the short-term. If this support is broken, the stock can trend lower to Rs 250 or Rs 245. If the stock does manage to rise past Rs 305, a rally to Rs 350 is likely. The long-term trend in the stock is up. Strong support is available in the Rs 250-245 zone. Investors with long-term perspective can use declines to this support zone to buy the stock.
Cadila Healthcare (Rs 870.2)
Cadila Healthcare surged 11.6 per cent last week after the company received approval from the US drug regulator to market its product in the US. The immediate outlook for the stock is bullish.
The stock can target Rs 935 in the coming weeks. Any intermediate pull back will find support at Rs 805. If this support is broken, the next one is available at Rs 778.
From a short-term perspective, declines to these supports will be a good buying opportunity. The outlook for the stock will turn negative only on a strong close below Rs 778.
On the upside, Rs 935 is a crucial long-term resistance level which is less likely to be broken. A reversal from this level can take the stock lower to Rs 750 or even Rs 650. On the other hand, a decisive breach of Rs 935 will take the stock to new highs. The target above Rs 935 is Rs 1275.
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