Short-term traders can look to buy the stock for a target towards Rs 1,900 levels in the next 3 months, suggest experts.
The stock rose from Rs 1,244 recorded on 26th April 2023 to Rs 1,667 as on 26th July 2023 which translates into an upside of 34%.
The stock also gave a breakout from a 6-week consolidation of a Flag pattern on the weekly charts which has opened room for the stock to head towards Rs 1,900 levels.
A bullish flag pattern is formed when prices move in a narrow range after a vertical upmove. The consolidation often resembles a small rectangle in the shape of a flag after a strong price action.
A breakout from the range on the upside confirms the continuation of the trend.
The momentum pushed the stock to a fresh record high of Rs 1,716 on 27th July 2023. It rose more than 5% in a week and over 8% in a month.In terms of price action, the stock is trading 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.
ET CONTRIBUTORS“Tata Communications stock prices have given a breakout with rising volumes from the 6-week consolidation of flag pattern. The ticker is in strong uptrend with the formation of higher highs and higher lows on the short term as well as long term charts,” Aditya Thukral, Senior Analyst at Master Capital Services, said.
“The stock has exhibited a flag pattern where the pattern’s target comes around Rs 1,960 level in the next few months. The volumes during the consolidation phase have been declining which validates the pattern,” he said.
“Ideally, flag pattern is a continuation pattern, and trend continuation should happen in the stock prices where longs should have stop losses below Rs 1,510 on a weekly closing basis which is acting as strong support for the pattern,” highlights Thukral.
Prices are well placed above all the exponential moving averages viz. 50-day, 100-day, and 200-day. Previous resistances continued to provide support to the stock prices at every juncture, following the principle of polarity.
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