Technical Check: Nearly 200% return in 2021! This IT company likely to cross 5000 in next 6 months

Persistent Systems Ltd rallied by over 190 per cent so far in 2021 compared to 20 per cent rise seen in the Nifty50, and the good news is that the momentum is not over yet.

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This IT stock with a market capitalization of about Rs 34,000 cr hit a fresh 52-week high of Rs 4753 on 17 December. Most of the technical indicators are suggesting a potential move above Rs 5000-5600 in the stock in the next 6 months that translates into an upside of 26 per cent from Rs 4427 recorded on 20 December, suggest experts.

Persistent Systems is a trusted global solutions company, delivering digital business acceleration, enterprise modernization and next generation product engineering services.

In terms of shareholding, both foreign investors and mutual funds reduced stake in persistent systems for the quarter ended September, data showed.

Foreign Institutional Investors (FIIs) reduced holding sequentially from 19.44 per cent to 19.3 per cent for the quarter ended September. Mutual Funds also decreased holding sequentially from 26.34 per cent to 23.98 per cent for the quarter ended September, data from Trendlyne showed.

In terms of valuations, the stock is trading at a Price Earning (P/E) multiple of 57.90x, that is slightly above the industry P/E of 34.82x, and an Earnings Per Share (EPS) of 76.80.

Technically, the stock is trading well above its crucial short- and long-term moving averages of 30,50,100 and 200-Days Moving Average.

The stock price recently moved from 3430 (Sept 2021) to 4389(Oct 2021). Profit booking followed and the stock made a low of 3666 in October.

After a sharp dip, bulls managed to push the stock back towards a new high of 4442 in November 2021.

“After correcting from 4442 the stock made a higher bottom at 3739 in Nov 2021. The stock is trading in a rectangle pattern in the range of 3500/4600 since Oct 2021,” Bharat Gala, President - Technical Research, Ventura Securities Ltd, said.

“Recently the stock made a new high of 4753 accompanied by supportive volumes. KST, Aroon Up/Dn & ADX Indicator suggest a possible up move,” he added.

Gala further added that the possible targets are 5600. If the stock price corrects downwards the buy levels are (4513-4365)-4258-(4150). Stop Loss to be observed in the trade is 4100.

(Disclaimer: The views/suggestions/advices 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.)