Short-term traders can use dips to buy the stock for a target of Rs 175 in the next 3-4 weeks, suggest experts.
The stock rose from Rs 129 as on July 4, 2023, to Rs 149.10 recorded on August 4, 2023, which translates into an upside of over 15% in a month.
The momentum pushed the stock to a fresh 52-week high last week. It hit a 52-week high of Rs 151 on 4th August 2023. The stock rose more than 4% in a week and more than 26% in the past 3 months.
The stock witnessed a breakout from a 12-month rectangle pattern in May 2023 on the weekly charts and since then it has been trading above the upper trendline resistance placed around Rs 120 levels.
The stock has been making higher highs and higher lows for the past 4 weeks which suggests there is momentum.
In terms of price action, the stock is trading well above most of the crucial short- and long-term moving averages such as 5,10,30,50,100 and 200-DMA on the daily charts which is a positive sign for the bulls.
The recent momentum has pushed the stock in an overbought zone; hence, some consolidation could be on the cards.
The daily Relative Strength Index (RSI) is 72.9, and RSI above 70 is considered overbought. This implies that the stock may show a pullback. Daily MACD is above its center and signal Line, this is a bullish indicator.
After the correction phase from July 2021, the Firstsource Solutions (FSL) stock has solidified its position, marking a base range between Rs 97 and Rs 120.
“We have observed that the FSL stock prices have successfully emerged from this foundational range and have entered a bullish trend marked by a sequence of higher peaks and troughs,” Omkar Patil, Technical Research Associate at GEPL Capital, said.
“Specifically, the prices have managed to rise above the consolidation zone, surpassing the Rs 137 mark. This breakaway, complemented by an escalating yet unbroken gap over the past fortnight, substantiates the inception of an upward trend. The Breakout was in the form of the Rectangle pattern,” he said.
“The stock prices have consistently stayed well above the 12 weeks Exponential Moving Average (EMA), which has historically served as a dynamic support level,” highlighted Patil.
“The Momentum indicator RSI is rising and has maintained the formation of Higher Highs & Higher Lows. Going ahead we expect the prices to move higher till Rs 175 level where the stop loss must be Rs 139 strictly on the closing basis,” he recommends.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)