Multibagger Midcap Switching Gears for HIGH Upside!

  • Stock Market Analysis
  • Editors Pick

One sector that is making investors cock-a-hoop is Information Technology. The Nifty IT index has rallied around 12% from the fall in mid-April 2023, amid bad earnings report by Infosys (NS: INFY ), and closed Friday’s session at over a 2-month high. Most of the IT counters are looking good on charts, but one midcap that’s catching all the attention is Tata Elxsi Limited (NS: TTEX ).

It has probably been the best IT performer after the Covid-19 pandemic as it gave a staggering return of around 10x from the March 2020 lows, outpacing every other IT stock. But after hitting an all-time high of INR 10,760 in August 2022, the stock started correcting and fell to a low of INR 5,709, depicting a sharp fall of over 46%.

Image Description: Daily chart of Tata Elxsi with volume bars at the bottom

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But it seems like the stock is reversing from the lower levels as it has completed its base formation on the daily chart. For the last many months, it had been trading sideways, essentially going nowhere. The range of this consolidation phase was a broad one, with the resistance at around INR 7,200 and support at INR 5,800 - INR 5,900. In the month of May 2023, investors were probably accumulating this stock which can be seen via volume action.

There has been a consistent increase in the volume figures during this month, with some days also showing spikes. The 10-day average volume which stood at 128.5K shares at the end of April 2023, increased over 110% to 282.2K shares by Friday, and this is the jump in average figure which holds a higher importance than an individual day’s volume increase, from a longer-term perspective.

On Friday, the stock surged 2.84% to INR 7,467.1 and soared past the resistance of the range. The volume on this day was recorded at over 714K shares, the highest figure in over 7 months. Clearly, the current rally is backed by decent volume which increases the reliability of the impending move.

On the upside, the stock holds the potential to surge to INR 8,300 which is where it will also fill the gap being left on the daily chart amid a gap-down opening on 17 October 2022. If traders are looking for a level to book their long positions, this gap area might be a good consideration.

Read More: Opinion: Should you Start with Equity or Derivatives Trading?

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  • Subrata Dhar @Subrata Dhar
    very nice analysis Tata Elxsi.
    Like 2
    • Aayush Khanna @Aayush Khanna
      Thanks, Subrata :)
      Like 0
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  • Saurav Mandal @Saurav Mandal
    holding from 2020, booked half profit last year and now expecting multibagger gains in coming days
    Like 1
  • Shaik Abdullah @Shaik Abdullah
    Good AI stock can hold for next 10 years
    Like 0
  • Sandeep Shah @Sandeep Shah
    I am positive about this stick
    Like 0
  • Juie Mukherjee @Juie Mukherjee
    Like 1
  • Rahul Mehra @Rahul Mehra
    V nice
    Like 1

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