Technical Check: Paytm share price in weak territory; should you buy?

Paytm share price gained nearly 2 per cent or by Rs 10 on the NSE to quote at Rs 553.50 after Morgan Stanley Asia and Ghisallo Master Fund bought 54,95,000 and 49,80,000 shares, respectively, in bulk deals at Rs 534.80 per share. 

Paytm will be a key beneficiary of India's Unified Payments Interface (UPI) incentive scheme, Morgan Stanley said on Thursday. The Union Cabinet on Wednesday approved the incentive scheme of Rs 26 billion for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (P2M) for FY23, compared with Rs 15 billion in FY22. 

Technically chart does not show an appreciable improvement, market expert Kunal Saraogi said. Though there is a pullback from lower levels the structure remains extremely weak, he opined. He said that selling pressure will be seen at all levels in this stock. It is highly unlikely that there will be a big runaway rally in this stock, Saraogi cautioned. investors. 

Intraday Price Chart  

Source: NSE

Earlier, technical analyst Nilesh Jain while speaking to Zeebiz.com had said that investors wanting to buy Paytm shares can do it only with a trading perspective. The chart structure is positive, he had said, adding that the counter can move upside of 14 per cent from the current market price of Rs 571. 

Jain, who is Assistant Vice President - Lead Derivative and Technical Research at Centrum Broking had recommended Paytm for targets of Rs 600 and Rs 650 with a stop loss of Rs 540. Investors can look to buy it at current levels or on declines.   

Paytm shares were also recommended earlier by Analyst Simi Bhaumik for targets of Rs 590/600.          

Paytm share price has fallen by nearly 70 per cent from the issue price of Rs 2,150. At current levels, the 1-year returns given by this negative 47 per cent as against (-) 2.1 per cent returned by broader market Nifty50. The underperformance is over 47 per cent during this period.  

Momentum indicator MFI is lingering around 50.4 according to data sourced from Trendlyne. Relative Strength Index or RSI, which is another momentum indicator is at 50.8. A number below 20 suggests that the stock is oversold while above 70 is considered overbought.  

The volatility in this stock has been low over a 1-year period at 0.92 and below 1.  

The fintech company recently informed stock exchanges about its Q3 performance update ahead of the October-December quarter results. Moreover, Surinder Chawla has been appointed as new Managing Director and CEO of Paytm Payments Bank.   

The company disbursed 3.7 million loans worth Rs 3,665 crore (USD 443 million, y-o-y growth of 330 per cent) in December 2022, the exchange filing said. The number of loans disbursed during the month was up 117 per cent.   

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)