Mahindra Holidays Stocks Rallied 3% With Strong Volume!

In today’s trading session, the Nifty has been trading sideways with a positive bias. Within this range-bound movement, one stock in the hotel and resort industry has outperformed its peers and the market, rallying nearly 3% with strong volumes. Currently, it is trading just below the breakout level of a 50-day continuation pattern. 

The stock in focus is Mahindra Holidays & Resorts India Ltd, a company that specializes in providing leisure hospitality services. Its main focus is on operating resorts and offering family holidays through vacation ownership memberships. The company offers a wide range of activities, including adventure sports, bird watching, camping, dance workshops, kids’ clubs, pottery, and rappelling. Founded on September 20, 1996, the company is headquartered in Mumbai, India. Its flagship brand, ‘Club Mahindra,’ boasts over 250,000 members. 

With a strong return on equity (ROE) track record of 29.3% over the past three years, the company has also managed to reduce its working capital requirements from 139 days to 103 days. 

From a technical standpoint, the stock has been consolidating within a range, forming lower highs and lower lows at Rs 318.05 and Rs 281.55 respectively. Notably, a swing high was formed at Rs 315.8 on June 5, 2023. By drawing a trendline from the high of April 25, 2023 (Rs 318.05 level) and connecting it with this swing high, we can identify a breakout trendline of a bullish up flag pattern on the daily chart. Interestingly, the stock has been trading just below this trendline at Rs 307.50, indicating a potential breach of the consolidation range in the upcoming sessions, which would confirm the breakout of the discussed price pattern. 

Considering the breakout level of Rs 314, the minimum potential target for this breakout stands around Rs 377, representing a gain of approximately 20% from the mentioned breakout level. Therefore, swing traders and short-term investors should closely monitor this stock as it shows strong performance and the potential for a breakout soon.