Birlasoft stock price: Check the chart: Down 40% from the peaks! The patterns of this choice by Ashish Dhawan may suggest a reversal

Birlasoft, part of the ITES sector, fell more than 40% from its highs in January 2022, effectively putting stocks on a bear market, but chart patterns suggest a reversal can be expected.

Shares with a market capitalization of more than 9,700 rupees reached a 52-week high of 585 rupees on the BSE on January 10, 2022, but failed to hold momentum. It closed at 342 rupees on June 22, a drop of more than 41 percent.

Investors looking for short-term trading may see new money invested now or a decline target up to Rs 365-380 over the next 4-6 weeks, while the long-term target is set at Rs 480, experts suggest.

The stock first reached its first support just below the 200-DMA in February 2022, but the rebound failed to maintain momentum and the rally collapsed in April 2022 after reaching a peak of 497 rupees on the BSE.

Since then, stocks have made lower bottoms and lower peaks. He recorded the formation of the “Cross of Death” in April 2022 in the daily charts, which suggests a weakness in the short term.

But on the weekly charts, he completed the ascending ABCD Harmonic model at 320 levels and formed a bullish harami model. Bull harami is a technical diagram used by chartists to notice reversals in the sword trend.

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On the price front, the shares are trading above 5,10-DMA, but below 20,30,50,100 and 200-DMA. The relative strength index or RSI is 42.3, which is positive.

RSI under 30 is considered oversold, and over 70 is considered overbought, according to data from Trendlyne.

“The shares completed the upward ABCD Harmonic at 320 levels and prices are currently trading within its PRZ (potential reverse zone) in the weekly time frame,” said Rohan Patil, technical analyst at Bonanza Portfolio.

“In terms of candlestick prices, they have formed an upward harami pattern and prices have completed a base formation near the lower level of the pattern in the weekly time frame,” he said.

The RSI inertial oscillator (14) shows positive divergence at oversold levels and is maintained above 30 levels. In addition, prices have completed their 50% recovery from the bottom of March 2020.

“A lot of technical support is at current levels, so one can start buying at Rs 342 and above with a drop close to Rs 335 levels with a strict stop loss at Rs 320 levels. On the higher side, 365 Rs will be the first resistance for the counter, if crossed over the same, then 380 Rs will be on the cards for the next 4-6 weeks, “Patil recommends.

Main view:

Well-known investor Ashish Dhavan holds a 1.3% stake in

for the quarter ended March 2022, compared with 1.8% in the December quarter, Trendlyne data show.

Birlasoft is part of the multibillion-dollar diversified CK Birla Group. It combines the power of domain, corporate and digital technologies to rethink business processes for customers and their ecosystem, according to the company’s website.

sees Birlasoft as an investment idea with high confidence, according to a report published in the first week of June 2022. The fair price for this small IT company is estimated at 480 rupees.

The company’s repeated demonstration of “talks” leads us to believe that it is on track to achieve its stated goal of revenue from $ 1 billion to 25E FY, the report added.

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

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