Technical Check: SIS back above 200-DMA but technical check suggests long trading opportunity

Leading security company in India SIS Ltd rose more than 10 per cent in the last one year compared to 10 per cent rise seen in the Nifty50. Technical indicators suggests that a long-term trend is emerging and hence, traders can look at buying the dip.

The company with a market capitalization of more than Rs 7000 cr hit a 52-week high of Rs 559 on 8 February 2022 but the trend turned sideways amid negative global cues.

Technically, after a sharp downward trend seen in the stock price - SIS Ltd seems to have completed after it witnessed an upside bounce from the lows in this week.

The stock rallied more than 6 per cent in a week compared to a near 1 per cent rise seen in the Nifty50 in the same period.

The stock reclaimed its crucial long-term moving average of 200-DMA placed at 470 on 9 March which suggests that bulls have started to take control. However, it is still trading below 50, and 30-DMA.

The stock has been making a higher top and higher bottom formations which is positive for the bulls. If the momentum sustains, the stock could well hit 490-525 which translates into an upside of about 10 per cent from Rs 474 recorded on 9 March, suggest experts.

“We observe a formation of higher tops and higher bottoms with larger swing moves (indicative of upper and lower trend lines),” Nagaraj S. Shetti of HDFC Securities said in a note.

Presently, the stock price is making an attempt of another higher bottom at the support of up sloping trend line at Rs 428 in last week.

“This is a positive indication, and one may expect further upside in the stock price ahead. The volume has started to pick up in this week and weekly 14 period RSI shows turn up from near 45 levels,” he said.

This could indicate a further strengthening of upside momentum in the stock price ahead. Shetti further added that the overall chart pattern of SIS indicates a long trading opportunity.

One may look to create positional long with a target price of Rs 490-525, and a stop loss can be kept at Rs 424 with a time horizon of 3 months, recommends Shetti.

(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.)