Triangular pattern breakout: Coforge Limited
The company is backed by strong financials and has reported consistent increasing revenues and net profits.
Coforge, formerly known as NIIT Technologies, is an Information Technology (IT) solutions company, primarily engaged in providing computer programming consultancy and related activity. The company is backed by strong financials and has reported consistent increasing revenues and net profits.
The company’s stake is majorly held by the promotors, which is a little over 50%. The foreign institutions hold about 20% stake while 18% share is held by the domestic institutions. The rest is held by the retail portion. Thus, it has strong support from the institutions and promotors who believe in their business management.
The daily chart of Coforge is quite interesting, as it witnessed the breakout of a triangular pattern. The stock has surged over 2% backed by huge volume which validates the breakout. Moreover, the RSI is in bullish territory and MACD histogram is rising which shows that the stock has the potential for further upside. The Elder Impulse System is displaying a fresh buy signal. Even Mansfield Relative Strength indicator is in the bullish zone which suggests that the stock has outperformed the broader market. The stock trades well above all the short and long term moving averages on the weekly time frame. As per the pattern, the stock has to potential to surge over 50% in the medium term. The stock is meeting most of the CANSLIM parameters and moreover, the stock is meeting the Warren Buffett investment rules.
Nifty IT has been the star performer in the last few weeks, as it supported Nifty in turbulent times. Being an integral part of the index, it has outperformed most of its peers and even the index in the medium term. The IT index has surged about 60% while Coforge has skyrocketed over 113% since January. This shows the quality of the stock, and thus, it deserves to be included in traders watchlist.
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