Chart Check: Breakout from falling trendline adds strength to Persistent Systems; stock could retest record highs

Persistent Systems, part of the IT sector, outperformed the index as it rose over 18% in a month, but the rally may not be over yet, suggest experts.

Short-term traders can look to buy the stock now or on dips for a possible target of Rs 4,950 in the next 1 month which is also its record high, suggest experts.

The IT stock gave a breakout from a falling trendline above Rs 4,200 on the weekly charts which have opened room for the stock to retest April 2022 highs.


Persistent Systems stock hit a record high of Rs 4,950 on 5th April 2022, but it failed to hold on to the gains. The stock bounced back after hitting a low of Rs 3,091 on 26the September 2022.

The stock has been in an uptrend since then. It rose more than 18% in a month, and over 20% in the last three months. The stock rallied over 30% in the last 6 months.

The momentum pushed the stock closer to overbought levels; hence, some consolidation could be on the cards.

The Relative Strength Index (RSI) is at 73.8. RSI above 70 is considered overbought. This implies that stock may show pullback. MACD is above its center and signal line, this is a bullish indicator.

The recent structure of the Nifty50 is negative but technical bounce cannot be ruled out. From a sector perspective, beaten down sector IT is gaining movement on the higher side.

“Among the IT companies, Persistent Systems has a strong setup as price has formed a base followed by a breakout. The stock took support at the role reversal level with breach of the falling trendline,” Kapil Shah, Technical Analyst, Emkay Global Financial Services Limited and Trainer at FinLearn Academy, said.

“It indicates respect to support and disrespect to resistance. It is a bullish development. Stock is sailing above short-term to long-term moving average indicating momentum in the stock. MACD has given positive crossover in the positive zone,” he said.

“Based on the aforementioned rationale, the stock offers a buy opportunity in the range of Rs 4,575 to 4,420 range with a stop loss at Rs 4,250 on a daily chart closing basis. On the higher side, the Stock has resistance at Rs 4,950. Duration of trade can be of 1 month,” recommends Shah.

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