Shriram Finance Ltd has emerged as a strong momentum stock after the non-banking financial company broke out from a classical cup & handle chart formation and surged to a fresh 52-week high in early November.
Technical analysts point out that the stock has rallied more than 9 % in the past week, over 22 % in a month and about 34 % over three months. The breakout above the neckline of the cup & handle suggests a bullish trend continuation, with some traders targeting a short-term move above Rs. 900 over the next 3-4 weeks.
From a structural perspective, this pattern is often viewed as a bullish continuation signal: the “cup” represents a period of consolidation followed by a “handle” which typically forms on reduced volume before a breakout on increased volume.
Given this technical setup, investors and traders may consider adding the stock, keeping in mind proper risk controls including watching for a pull-back to the breakout zone as a potential support.
