The new age company stock price hit a 52-week high of Rs 844 on 8th August 2022 but it failed to hold on to the momentum. It bounced back after hitting a low of Rs 439 on 24 November 2022.
The stock is picking momentum which is a positive sign for the bulls. It rose 4% in a week and over 8% in a month. The stock rallied more than 20% in the last 3 months.
The stock is on verge of a breakout from an inverse head & shoulder pattern where the neckline is placed around Rs 640. A sustained move above this level can push the momentum towards Rs 700 levels in the next 3-4 weeks, suggest experts.
An inverse head & shoulder pattern is formed with defined 3 bottoms with the middle bottom (head) which is significantly lower than the other two bottoms (left and right shoulders).
(Also read: Heads and shoulders pattern)
In terms of price action, the stock is trading well 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.
Paytm is a brand of One 97 Communication. Investors and traders have seen a significant declining tendency since the company was listed.
March 2022 marked the same time last year when several bottoms were formed near Rs 500 and the stock price increased till Rs 840.
“Paytm stock price could not persist and owing to corporate news, it fell back to the Rs 450 level close to ~ 48% from the previous top. But, as of late, we can observe that the stock’s higher high, the higher bottom trend began in December 2022 with the aid of a rising trendline. As of now, multiple bullishness can be seen on the chart,” Kiran Jani CIRA, Head Technical Research at Jainam Broking, said.
“The price of the stock is trading above both its 200-day moving average and its 50-day moving average. We can see another bullish scenario technically,” he said.
We can first notice the price has formed an inverted head and shoulder and price consolidation just near 200-SMA,” highlighted Jani.
“In the same time frame, we can see a bullish divergence RSI. The bullish divergence means prices making higher low and the 14 periods RSI making lower low,” he added.
“Based on an inverted head and shoulder neckline at Rs 640. Thus, unless it breaks the right shoulder low Rs 600 level, we expect prices to touch the Rs 720 level,” recommended Jani.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
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