MRF shares: India's first 6-digit stock headed towards Rs 1.5L mark? What analysts say

Shares of MRF Ltd on Tuesday made a history on Dalal Street as they hit the psychological six-digit mark of Rs 1,00,000 (roughly $1,214) -- the first listed stock to do so in India. On a fundamental basis, the average target price on the stock stands at Rs 82,274, which hints at an 18 per cent potential downside ahead, but chart patterns suggest breaching levels of Rs 1.02 lakh could give the tyre stock a further lift. A few technical analysts even suggested targets as high as Rs 1.47 lakh on the counter. The achievable targets in the near-term, however, are in the Rs 1.10-1.15 lakh range. A strong support for the stock is seen at Rs 95,000-96,000 levels.

Gaurav Bissa, VP, InCred Equities said MRF has witnessed a strong upside in the last few months with continued outperformance against broader market indices. Bissa said the stock has formed a Bullish Flag pattern on the weekly charts, which is a continuation pattern in nature. MRF had earlier given a breakout retest from a Triangle pattern of Rs 95,000 level, followed by some consolidation, Bissa noted.

“A close above Rs 1 lakh will confirm Bullish Flag breakout, which can push it towards Rs 1,15,000 level. The stock is showing equally interesting setup on point and figure charts. The stock has seen follow through of bullish ABC pattern breakout on 0.25x3 daily time frame. The cluster target comes around Rs 1,15,000 on point and figure charts, which coincides with the bullish flag and triangle pattern targets," Bissa said.

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Santosh Meena of Swastika Investmart said the technical chart analysis indicates there is further potential for rise, as one can observe a breakout pattern known as a Classical Flag formation. This pattern, Meena said, suggests that the stock's upward momentum is likely to continue, with a potential target of around Rs 1,10,000.

“It's important to note that even if there are temporary pullbacks, the previous breakout level of Rs 95,000 is expected to provide strong support and act as a solid foundation for the stock,” he said.

Osho Krishan, Senior Analyst for Technical & Derivative Research at Angel One said the Rs 96,000 level is likely to be a strong support zone. He said a weekly closure above Rs 98,600 would boost the sentiment on the counter. "Ideally, the pattern target comes around Rs 1,20,000 but to be on the conservative side, Rs 1,08,000-1,14,000 seems very much achievable in the comparable period," he said.

Profit booking

After reporting a strong Q4 earnings the largest tyre manufacturer has gained around 18 per cent in the last 2 months, so some kind of profit bookings cannot be ruled out, said Prashanth Tapse, Senior VP (Research), Mehta Equities.

"On a YTD basis, MRF’s stock has experienced a remarkable rally of over 46 per cent. Technically post remarkable rally If today's closing is above Rs 99,950, then it can head towards Rs 104,650 and Rs 1,10,000 with pullback support near Rs Rs 97,250 to 97500 zone," he said.

Long-term targets

The stock looks set to test its resistance levels placed at Rs 1,02,795. A quarterly close above this immediate resistance level will open a massive upside in this stock, as technical indicator MACD exhibits a fresh buy signal, with the target projected at Rs 1,47,725 level, said Sujit Deodhar, Head Technical Analyst at Wellworth Share & Stock Broking.

"So, traders holding on to this stock should continue to hold on to their long positions and any dip towards Rs 89,000-90,000 levels (200DMA) should be utilised as a buying opportunity to add more to their portfolio," Deodhar added.

Vaibhav Kaushik, Research Analyst, GCL Broking said the stock has a strong support near Rs 95,000 level. As long as MRF trades above Rs 95,000, it can touch Rs 1,25,000 very soon till Diwali, he said.

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