kpit technologies stock: Chart Check: Bullish trend intact in this IT company which rose more than 100% in a year after the breakout

Part of the IT sector, which is up more than 100% in a year, is on track to retest its 52-week high after the recent breakout of a consolidation pattern on the daily charts.

The stock with a market capitalization of over Rs 19,500 crore has risen from Rs 337 recorded on October 21, 2021 to Rs 711 on October 21, 2022, translating to a rise of over 110% in the past year .

The stock hit a 52-week high at Rs 800 on January 10, 2022, but it failed to maintain momentum. It rebounded from bottoming out at Rs 440 in May 2022 and Rs 450 in June.

After retesting support twice in May and June, the stock rallied strongly. It has increased by more than 6% in a week, by 18% in a month and by more than 30% in the last 3 months.

Short-term traders who missed the rally can consider entering the declining stock for a possible target of Rs 800 which is also its January 2022 high within the next 2 months, experts suggest.

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On the price front, the stock is trading above the crucial short- and long-term moving averages of 5, 10, 30, 50, 100, and 200-DMA, which is a positive sign for bulls.

The Relative Strength Index or RSI is at 67.9. An RSI below 30 is considered oversold and above 70 is considered overbought, according to data from Trendlyne. MACD is above its center line, but below the signal line.

After strong selling pressure seen in the IT sector index, it has now started to form a base, showing a break in selling pressure.

“The index has started to find feet in the lower consolidation band. Among IT stocks, KPIT stock has outperformed,” said Kapil Shah, Technical Analyst, Emkay Global Financial Services and Trainer – FinLearn Academy.

The stock formed a rounding pattern for over 100 days, followed by a breakout to the upside.

“The stock gave a breakout after the consolidation; it shows a bullish continuation sign. The action is based on the medium-term moving average. The relative strength line has an upward trajectory, implying the strength of the stock,” he said.

“The Momentum RSI oscillator has taken support from its base around the 50 level. MACD has a positive crossover in the positive zone indicating a bullish continuation sign,” Shah added.

“Based on the rationale above, the stock offers a buying opportunity in the 695-675 range with a stop loss of 640 at the close. It has potential upside to 800 levels at the price. for the next 2 months,” Shah recommended.

(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Karen J. Nelson