One97 Communications, the operator of payments and financial services company Paytm, has given a strong consolidation breakout on June 8 and formed a long, bullish candlestick pattern on the daily charts, with healthy volumes.
The stock has seen a strong gap-up opening, and rallied more than 6 percent to settle at Rs 772, the highest closing level since August 23, 2022 after decisively breaking nearly a month-long consolidation.
In the gap-up opening itself, the stock of One 97 Communications has seen a breakout of long downward sloping resistance trendline adjoining highs of August 8, 2022 and May 9, 2023.
Overall, the stock seems to have gained strength after the golden crossover in the second half of May 2023, with the 50-day EMA (exponential moving average) crossing 200-day EMA on the higher side, which is generally considered as a positive sign and the stock can get into momentum.
With Thursday's rally, there was a Bollinger band expansion on both sides, and the stock has filled the bearish gap created on August 29, 2022.
Now if the stock fills another bearish gap of August 12, 2022 and reclaimed its swing high of last August, then there could be a possibility of a big upward journey in future, experts said.
Broadly, the stock has maintained higher top, higher bottom formation on the daily scale since the record low in November last year, indicating strong positive undertone. It has surged more than 76 percent from its record low.
"On the daily charts, the stock has given an Inverted head-and-shoulder pattern breakout with huge volume confirmation which confirms the strength of the bulls. The weekly RSI (relative strength index) of the stock is rising and placed above 60 mark which shows strong positive momentum," Vidnyan Sawant, AVP - Technical Research at GEPL Capital said.
He further said the stock has immediate resistance placed at Rs 844 and Rs 900, on the other hand, the support zone is at Rs 706 and Rs 680. If stock sustains below Rs 706, then the bullish view will be negated, he added.
Mehul Kothari, Head of Technical Research at Anand Rathi, believes in Thursday’s session, the stock confirmed a major range breakout of Rs 750. The stock has managed to confirm this breakout after September 2022.
"The potential of this breakout can pull the stock towards Rs 850 in the coming weeks. On the downside, support is placed at Rs 720," he said.
Traders can hold their long positions in the stock for the mentioned levels, he advised.
Also, the stock has recently experienced a consolidation breakout on the weekly timeframe, indicating a potential upward trend. "The trend is expected to remain positive with upside potential of Rs 830," Rupak De, Senior Technical analyst at LKP Securities said.
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