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The downtrend in the stock of Wipro (₹408.10) that has been in place since January this year could be approaching a bottom. Investors with a medium-term perspective can consider buying this stock at current levels.
In February this year, we had given a sell on this stock in this column when the price was at ₹561.61. In the same call we had said that Wipro will become a good buy when it comes down to ₹380-₹360. This fall has almost happened. A low of ₹384.60 has been made so far and the stock has been oscillating around ₹400. The 200-Week Moving Average, currently at ₹386 has been giving good support for the stock. Even if Wipro breaks below these supports, next strong supports are at ₹365 and ₹350. A fall beyond ₹350 is unlikely.
Resistances are at ₹425 and ₹440. A strong break above ₹440 can take Wipro up to ₹525-₹535 by the second quarter of 2023. Thereafter a corrective fall to ₹500-₹480 cannot be ruled out. From a long-term perspective, Wipro has to breach ₹535 decisively to revisit ₹700 levels.
Medium-term investors can buy the stock at current levels. Accumulate more on dips at ₹375 and ₹360. Stop-loss can be kept at ₹310. Trail the stop-loss up to ₹450 as soon as the stock moves up to ₹490. Move the stop-loss further up to ₹485 when the stock touches ₹505 on the upside. Exit the stock at ₹520.
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