Chart Check: Persistent Systems retests breakout area of 74-week inverse Head & Shoulder pattern; should you buy?

Persistent Systems Ltd, part of the software and consulting industry, is undergoing consolidation around the breakout area of the 74-week inverse Head and shoulder pattern on the weekly charts.

Short-term traders can look to buy the stock for a target above Rs 5600 in the next 2-3 months, suggest experts.

The stock gave a breakout above the neckline of an inverse Head and shoulder pattern on the weekly charts in May 2023 placed around 5000 levels.


The stock hit a record high of Rs 5278 on 2nd June 2023, but it failed to hold on to the momentum. The stock has recovered from lows and is now hovering above 5000 levels in August 2023 which suggests that bulls are here to stay.

An Inverse Head and shoulder pattern is the mirror image of the Head and Shoulder pattern and is a bullish signal.

It is defined as three bottoms with the middle bottom (head – marked as H) significantly lower than the other two bottoms (left and right shoulders – marked as S). Also Read

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.

“In the recent doldrums of the market, second-tier IT stocks are doing well. The majority of Mid and small-cap IT stocks are sailing above short to long-term moving averages with an upward trajectory,” Kapil Shah, Technical Analyst, Emkay Global Financial Services and Trainer- FinLearn Academy, said.

“Persistent has formed a long Inverted Head and shoulder pattern for 74 weeks. Long-duration pattern has more probability of living its predictive value. After the breakout, the stock retested the support followed by a breach of the falling trend line. It indicates bullish setup,” he said.

“Based on the above technical setup, the stock looks good to accumulate in the range of 5112 to 5000 level stop loss of 4800 level. The upside potential can be up to 5600 to 5800 levels. It can take 2 to 3 months to pan out the above view,” recommends Shah.

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