The stock price of Mahindra Mahindra M&M hit their all-time high today after positive sentiment arising out of a fall in metal prices and the impact of Scorpio N sales on the bottom line of the firm. A fall in the prices of metals such as steel and aluminium, which are used as key inputs for production, has raised the prospects of improved profit margins for the Anand Mahindra-led auto company.
The large cap stock touched a new all-time high of 1,138. The previous close of Rs 1,104 had risen by 3.06 per cent to 80. 95 on the BSE.
M&M stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. Since the beginning of this year, the share has risen 35.13 per cent and has gone up 45.53 per cent in a year.
The firm's 1 lakh shares changed hands, totaling to a turnover of Rs 11.30 crore. The firm's market cap rose to 1.40 lakh crore.
ALSO READ: Mahindra launches its biggest, most powerful Scorpio-N starting at Rs 11.99 lakh.
The rally since the beginning of the CY 22 was linear with a decline in the number between not exceeding 38.2 per cent of the retracement, which signals strength and a robust price structure. The bullish channel line is close to the bullish channel line, forming a higher peak and higher trough in all time frame. The stock is trading at its 4th leg of the pattern, heading towards the Rs 1,200 level mark. However, there is a presence of Class B divergence on the daily 14 periods RSI, which are the first signs of price exhaustion. For the trend follower price sustenance above Rs 1,100 would maintain positive biasness while for medium-term investors a corrective dip towards Rs 1025 -- 1050 should be used as an ideal buying opportunity to ride the next leg of the up move towards Rs 1225 -- 1250. Mahindra has recently launched variants like XUV 300,700 and Scorpio N, which are great product launches and have received good feedback from the customers. XUV 700 saw a 45 per cent MoM growth in sales and is still in demand. The stock is affected by the Scorpio's topline which can add to their topline. The stock is currently trading at Rs 1,130. The current breakout could take it to Rs 1,222 levels. The price is above 200 DEMA, which is a positive sign. ALSO READ: Mahindra XUV 700 receives 5 star rating for adult occupants and receives GlobalNCAP's Safer Choice Award.
Demand for agricultural products can be brought up by the monsoon season, and crude prices are down. New product launches are doing well. The auto shares had been subdued in the last quarter due to higher metal prices, chip shortage, supply disruptions and volatile fuel prices. The auto sector is reviving after cooling off in metal prices, especially steel and aluminium, and hopes of improved profit margins. M&M share is on a high since the launch of its New Scorpio N which offers advanced features at competitive price and is gaining popularity among customers. The new launches coupled with tractor sales volumes are expected to boost the company's performance. The M&M stock has potential to touch the levels of 1250 -- 1280 in the medium term, according to the technical setup. The investors may hold their positions for the target and good returns. After almost 3 -- 4 years of underperformance, auto sector stocks including M M are rallying well due to lower raw material costs and falling petroleum prices in India. The current levels should be used by investors to book profits in their buy positions. In the coming weeks, Rs 980 -- 990 levels should be used to enter fresh buy positions.