Cummins and M&M: Chart Analyst Sees Continued Strength – A Week Ahead Look

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  Stocks and Investing on Fri, Aug 22nd, 2025 by moneycontrol.com

The Indian stock market has shown resilience recently, and chartist Milan Vaishnav believes this trend is likely to continue, with particular focus on Cummins India and Mahindra & Mahindra (M&M). In a recent analysis published by Moneycontrol, Vaishnav outlines technical indicators suggesting further upward movement for these two companies. This article breaks down his observations and what investors can potentially expect in the coming week.

Cummins India: Riding a Strong Uptrend

Vaishnav’s assessment of Cummins India paints a picture of consistent strength. The stock has been exhibiting a robust uptrend, consistently surpassing previous highs. He points to a “pole-and-flag” pattern formation on the daily chart as a key indicator. This pattern typically signals a continuation of the existing trend after a brief consolidation period.

The analyst highlights several crucial support and resistance levels. Immediate support is seen around ₹1,850, with a stronger level at approximately ₹1,790. These levels are considered potential buying opportunities for investors looking to enter or add to their positions. On the upside, resistance lies around ₹2,030-₹2,040. A decisive breakout above this level could pave the way for further gains, potentially reaching towards ₹2,150-₹2,200 in the medium term.

The Relative Strength Index (RSI), a momentum indicator, currently sits comfortably above 50, suggesting that the stock is still in an upward momentum phase. While Vaishnav notes a slight divergence on the RSI, he doesn't view it as a significant cause for concern at this time. He emphasizes that the overall trend remains firmly bullish.

Understanding the "pole-and-flag" pattern requires some technical analysis background. A pole represents a steep and rapid price increase, while the flag is a period of consolidation where the price moves sideways within a defined range. The breakout from the flag typically confirms the continuation of the initial upward movement (the pole). Investors interested in learning more about this pattern can find resources online, including explanations on Investopedia (https://www.investopedia.com/terms/p/poleandflag.asp).

Mahindra & M&M: A Reversal and Potential Upside

While Cummins India’s outlook is overwhelmingly positive, Vaishnav's analysis of Mahindra & M&M presents a slightly more nuanced perspective. He observes that the stock has recently undergone a reversal from a downward trend. This suggests a potential shift in momentum, although confirmation is still needed.

The key to this potential turnaround lies in breaking above a crucial resistance level around ₹1,500. Currently, this level acts as a significant hurdle for the stock's upward movement. A successful breach of this resistance would signal that the reversal is genuine and could trigger further buying interest. Support levels are identified at approximately ₹1,420-₹1,430, providing a cushion in case of any short-term pullback.

Vaishnav also points to a “rounding bottom” pattern forming on the daily chart for M&M. This pattern is generally considered bullish and suggests that the stock may be poised for a recovery after a period of decline. However, he cautions that investors should wait for confirmation of the breakout above ₹1,500 before initiating long positions.

Like with Cummins, understanding technical patterns like "rounding bottom" requires some familiarity with chart analysis. Investopedia offers a clear explanation of this pattern (https://www.investopedia.com/terms/r/roundingbottom.asp).

Overall Market Sentiment and Risk Management

Vaishnav’s recommendations are framed within the context of a generally positive market sentiment. He acknowledges that global factors, such as geopolitical tensions and inflation concerns, could introduce volatility. Therefore, he advises investors to exercise caution and implement appropriate risk management strategies. This includes setting stop-loss orders to limit potential losses if the stock prices move against their expectations.

He also emphasizes the importance of considering individual investment goals and risk tolerance before making any trading decisions. These recommendations are based on technical analysis and should not be considered as financial advice. Investors are encouraged to conduct their own research and consult with a qualified financial advisor before investing in any securities.