Stock Radar: Down 40% from highs! This IT stock is showing signs of rebound

has fallen by about 40 per cent from its recent 52-week high, which effectively puts the stock in bear territory, but technical suggests that there could be a technical pullback near its crucial support levels.

The IT stock, with a market capitalisation of more than Rs 1.1 lakh crore, fell nearly 39 per cent from its 52-week high of Rs 1,837 recorded on 30 December 2021 to Rs 1,123 on 27 May 2022.

The stock has seen a steep fall so far in 2022, but on a one-year basis, the IT stock is still up 14 per cent compared to about 8 per cent rise seen in the Nifty50 in the same period.

The stock hit a low of Rs 1,045 on 25 May before bouncing back. The stock is trading near important support where we see a harmonic pattern called AB=CD where two alternate moves are equal in length, suggest experts.

Fresh money can be deployed on dips for a target of Rs 1,190-1,250 and a stop loss can be placed below Rs 1,045 levels. The stock closed at Rs 1,123 on 27 May 2022.

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On the price front, the S&P BSE Sensex stock is trading above 5,10, and 12-DMA but below 20,50,100 and 200-DMA.

The IT space has witnessed a decent correction from its highs and Tech Mahindra has corrected sharply along with its peers.

“Prices have reached an important support where we can observe a harmonic pattern called AB=CD where two alternate moves are equal in length,” Ruchit Jain, Lead Research, 5paisa.com, said.

“This coincides around the support end of a Falling Channel and also the ‘RSI Smoothed oscillator has given a positive crossover from its oversold zone. The upmove in the last couple of sessions from its support indicates the probability of a pullback move in the short term,” he said.

Jain recommends traders buy the stock in the range of Rs 1,125-1,115 for potential targets of Rs 1,190 and Rs 1,250 in the near term. The stop loss on long positions should be placed below Rs 1,045.

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