Poonawalla Fincorp bounces back from 200-day MA! Time to buy?

POONAWALLA is the trending stock of Thursday and has soared over 5%. 

The stock of Poonawalla Fincorp has surged over 5% during the early hours of Thursday’s trading session. On the technical chart, the stock was hovering around its 200-day MA 6 trading sessions. Interestingly, the stock has seen a strong bounce from this MA and has also crossed above its 20-DMA and 50-DMA. The volume recorded today is found to be above average, indicating a stronger buying interest among the participants. With this, it has crossed above its prior swing high of Rs 245 level.

As per the Fibonacci retracement of its prior downtrend, the stock has moved above its 23.8% retracement level, which is a positive sign. Moreover, the 14-period daily RSI (53.50) is above its prior swing high. Thus, both RSI and price moving above their prior swing highs is a sign of bullishness. The MACD line has moved upwards after signalling a bullish crossover a few days back. The Elder Impulse system has indicated a fresh buy. Meanwhile, the KST and TSI indicators also have a bullish view.

On a YTD basis, the stock has surged about 10% and has outperformed the broader market. In a nutshell, the stock is showing signs of bullishness and is expected to trade higher in the coming days. A move above the 100-DMA level of Rs 256 shall be positive and the stock can test the level of Rs 292, followed by Rs 310 in the medium term. However, in case of weakness, the prior swing low level of Rs 210 must be watched as any fall below this level can trigger a major downtrend. The stock shows good trading opportunities for the near term and thus, traders shouldn’t miss out on this stock.

Poonawalla Fincorp, is an NBFC engaged in the business of providing loans for vehicles, construction, used vehicles and small businesses. With a market capitalisation of about Rs 17600 crores, it is one of the strong growing midcap companies in its sector.