According to experts, short-term traders can take advantage of dips in the stock to purchase it with a target of Rs 175 within the next 3-4 weeks.
The stock price rose from Rs 129 on July 4, 2023, to Rs 149.10 on August 4, 2023, representing a 15% increase within a month.
This momentum propelled the stock to reach a fresh 52-week high last week, hitting Rs 151 on August 4, 2023. In the past week, the stock rose over 4% and has seen a 26% increase in the past 3 months.
In May 2023, the stock broke out from a 12-month rectangle pattern on the weekly charts, and it has traded above the upper trendline resistance around Rs 120 levels ever since.
Over the past 4 weeks, the stock has consistently been making higher highs and higher lows, indicating strong momentum.
In terms of price action, the stock is well above most of the crucial short- and long-term moving averages on the daily charts, including 5, 10, 30, 50, 100, and 200-DMA. This is a positive sign for the bulls.
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The recent momentum has pushed the stock into an overbought zone, suggesting that some consolidation may occur. The daily Relative Strength Index (RSI) is 72.9, which is above 70 and considered overbought. This indicates that the stock may experience a pullback. Additionally, the daily MACD is above its center and signal Line, which is a bullish indicator.
After a correction phase starting in July 2021, the Firstsource Solutions (FSL) stock has established a base range between Rs 97 and Rs 120.
According to Omkar Patil, Technical Research Associate at GEPL Capital, the FSL stock prices have broken out of this base range and entered a bullish trend characterized by higher peaks and troughs. The prices have surpassed the Rs 137 mark and show a breakaway from a consolidation zone, supported by an uninterrupted gap over the past two weeks. This breakout is in the form of a Rectangle pattern.
Patil emphasizes that the stock prices have consistently remained above the 12-week Exponential Moving Average (EMA), which has historically served as a dynamic support level. He expects the prices to continue rising towards the Rs 175 level, with a recommended stop loss at Rs 139 on a closing basis.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)