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The stock of Mphasis Limited witnessed a sluggish first half this year. While it was forming higher lows since the beginning of the year, it could not really pass through the resistance at ₹1,800. However, in July, the stock pierced through this level and established a strong uptrend. Also, the 21-day moving average (DMA) was lying at those levels, providing additional cushion to the stock.
The rally that began in June continues to stay valid and the stock has been consistently forming higher highs and higher lows. Since the final week of August, the stock has been facing hurdle at ₹2,930. The price in fact softened to ₹2,750 towards the end of the month. But ₹2,750 acted as a support, denying the bears to drag the price lower and notably, 21-DMA coincided at those levels. On the back of this, the stock resumed its uptrend and on Monday, it broke out of ₹3,000-mark; a price drop yesterday is most likely to be corrective decline. Hence, traders can buy with stop-loss at ₹2,900; target at ₹3,100.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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