Birlasoft Share Price: Check Chart: 40% Down From High! The patterns in this Ashish Dhawan pick may indicate a reversal


Birlasoft, part of the ITES sector, has fallen more than 40 percent from January 2022 highs, effectively putting the stock in a bear market, but a reversal could be in the offing, the chart pattern suggests. Is.

Shares with a market capitalization of over Rs 9,700 crore hit a 52-week high of Rs 585 on BSE on January 10, 2022, but it failed to sustain the momentum. It closed at Rs 342 on June 22, which translates into a fall of over 41 per cent.

Experts suggest that investors looking for short-term trade can consider fresh money or downside in next 4-6 weeks with target above Rs 365-380, while long term target at Rs 480. has been placed at Rs.

The stock first hit its first support just below the 200-DMA in February 2022, but the bounce back failed to sustain the momentum and ended the rally after hitting a high of Rs 497 on BSE in April 2022.

Since then the stock has been making lower lows and lower highs. It recorded the formation of a ‘death cross’ on the daily chart in April 2022 which suggests weakness in the short term.

But, on the weekly chart, it completed a Bullish ABCD harmonic pattern at 320 level and formed a Bullish Harami pattern. A Bullish Harami is a technical chart pattern that chartists use to spot a reversal in a bear trend.

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On the price front, the stock is trading above the 5,10-DMA but below the 20,30,50,100 and 200-DMA. The Relative Strength Index or RSI is at 42.3 which is positive.

The trendline data shows that an RSI below 30 is considered oversold and above 70 is considered overbought.

“The stock has completed a bullish ABCD harmonic pattern at 320 levels and prices are currently trading within their PRZ (Possible Reversal Zone) on the weekly time frame,” said Rohan Patil, Technical Analyst at Bonanza Portfolio.

“A bullish harami pattern has formed in the candlestick price context and the price has completed a base formation near the bottom of the pattern on the weekly time frame,” he said.

The momentum oscillator RSI (14) is showing positive divergence at oversold levels and is forming above the 30 level. Besides, the price has completed its 50 per cent retracement level from March 2020 lows.

“Many technical supports are found at the current levels so one can initiate buy position at Rs 342 and take a downside at Rs 335 level with tight stop loss at 335 level. At higher levels Rs 365 will be the first resistance for the counter. If it crosses above then Rs 380 will be on the cards for the next 4-6 weeks,” recommends Patil.

Fundamental Approach:

famous investors Ashish Dhawan holds a 1.3 percent stake in

Trendline data shows that for the quarter ended March 2022, compared to 1.8 per cent in the December quarter.

Birlasoft is part of the multi-billion dollar diversified CK Birla Group. The company’s website said it combines the power of domain, enterprise and digital technologies to redefine business processes for customers and their ecosystem.

According to a report published in the first week of June 2022, Birlasoft sees it as a highly-convincing investment idea. The fair value for this small-cap IT company is estimated at Rs.480.

The company’s repeated ‘walking the talk’ performance gives us confidence that it is on track to achieve its stated target of USD1bn revenue by FY25E, the report said.

(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent the views of The Economic Times)


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