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Investors with a short-term perspective can buy the stock of KPIT Technologies at current levels. The stock encountered a key resistance at ₹225 in March and changed direction. Since then it has been on a medium-term downtrend. In April, the stock plummeted 44 per cent and broke below key support levels. On April 30, the stock tumbled 15 per cent with extraordinary volume, dragging its daily indicators into deep oversold levels. However, in that session, the stock formed an inverted hammer candlestick pattern which is seen following a downtrend and taken as a trend reversal sign.
The stock has breached the lower boundary of the Bollinger Bands signalling a corrective rally. The stock surging 8 per cent on Monday accompanied by above-average volume suggests that the corrective rally could have begun. The stock can extend this upmove and reach the price target of ₹118.5 and ₹121 in the coming sessions. Buy with a stop-loss at ₹111.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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