With the upcoming budget and result season, stock specific moves are likely to be seen in the market. M&M Finance, being into commercial vehicle lending, is one of the cheapest stocks available among its peers. Hence, it is likely to witness money flows in the days to come as sentiments improve further. Moreover, M&M Financial has almost recovered towards its November highs while broader index is still almost 200 points lower than those levels.
It indicates ongoing buying momentum in the stock and it provides a good opportunity to ride further up move towards 400 levels. After making highs near Rs 340, M&M Financial witnessed significant addition of short positions.
As a result, the stock declined sharply towards Rs 270 in the later part of December series. Since then as the stock recovered, closure of short positions is still continued and it has shed close to 30% open interest since the month of December. We expect the current short covering trend may scale up to Rs 400 levels in the near term.
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