This midcap IT stock has soared over 100-DMA! Is it the start of an uptrend?

This midcap IT stock has soared over 100-DMA! Is it the start of an uptrend?

Indian Market
by 5paisa Research Team Last Updated: 2022-08-17T11:38:44+05:30

Persistent Systems jumped 3% on Wednesday’s trading session. 

Indian indices have opened higher amidst positive global cues on Wednesday. Interestingly, the stock of Persistent System has outperformed its peers and broader market. It has soared over 3% during the early Wednesday hours and recorded good volumes. After correcting over 35% from its prior swing high level of Rs 4954, the stock had registered a double bottom breakout a few days back. On Wednesday, it jumped above its short-term resistance level of Rs 3845 and is above its 100-DMA. Currently, the stock is above its 20-DMA, 50-DMA, and 100-DMA. With the stock forming higher highs and higher lows on the technical chart, it is on its road to uptrend. 

The 14-period daily RSI (62.85) depicts similar views. It is in bullish territory and shows strong strength in the stock. The MACD line is above its signal line and zero line, showing bullishness. The OBV is at its peak and demonstrates strong strength from the volume’s perspective. The Elder Impulse system has indicated a fresh buy. Meanwhile, the TSI and KST indicators are also improving and show short-term bullishness. The Relative Strength (RS) is positive and shows outperformance against the broader market. In a nutshell, the stock is technically strong and is expected to trade higher in times to come. 

In the past one month, the stock has climbed by over 20%. With such positivity, the short-term target is at the 200-DMA level of Rs 4035, while the medium-term target is likely placed at Rs 4200. One can place stoploss below 3600 level. It provides good trading opportunities and one can expect good gains in near future. 

With a market capitalization of about Rs 29200 crore, Persistent Systems is one of the strong growing midcap companies in its sector. It is engaged in the business of building software products and providing product life cycle solutions to its clients.

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