The IT stock hit a fresh high of Rs 800 on 10 January 2022 but failed to hold on to the momentum. The stock closed at Rs 645 on 26 September which translates into a downside of nearly 20 per cent.
KPIT did bounce back after hitting Rs 440 on 26 May 2022, but faced resistance above Rs 630 since April 2022, and moved in a range since then. Recently, the stock gave a breakout from the said range earlier in September which suggests strength in the trend.
The stock has risen more than 15 per cent in a week, and over 16 per cent in a month, Trendlyne data showed. Most of the technical indicators point towards an upmove in the stock.
The relative strength index (RSI) is at 66.3. RSI below 30 is considered oversold and above 70 is considered overbought, Trendlyne data showed. MACD is above its center and signal Line, this is a bullish indicator.
On the price front, the stock is trading well above the short- and long-term moving averages such as 5,10,30,50,100, and 200-DMA which is a positive sign for the bulls.
The stock price started its upmove from Rs 90 recorded on November 2020. The stock made a series of higher tops and higher bottoms and finally, it made a high of Rs 800 in January 2022.
“The stock entered the profit booking zone and corrected to Rs 440 (May 22). The stock recently gave a range breakout and crossed previous swing high of Rs 635, making a new recent high of Rs 683, accompanied by supportive volumes,” Bharat Gala, President – Technical Research,
“The demand index, CCI & vortex indicator suggest a possibility of crossing all-time high of Rs 800. The possible targets are Rs 800-1,100,” he said.
“If the stock price corrects downwards the buy levels are (Rs 635-605)-Rs 581-(Rs 556-543).
A stop loss to be observed in the trade is Rs 500,” recommends Gala.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)