firstsource solutions stock price: Chart Check: This midcap offers attractive risk-reward post 40% fall from highs; contra buy?

, a part of the IT Providers trade, has fallen by about 40% from its February 2022 excessive however current consolidation at decrease ranges suggests shopping for demand close to assist.

Excessive danger merchants can look to purchase the inventory for a long run goal above Rs 200 within the subsequent 5-6 quarters, recommend specialists.

The inventory hit a 52-week excessive of Rs 168 on 2nd February 2022 nevertheless it failed to carry on to the momentum. The inventory bounced again after hitting a low of Rs 93 again in June 2022.

The inventory closed at Rs 103 on twenty seventh January 2023 which interprets right into a fall of about 40% from the 52-week highs.

The inventory is hovering close to the 50-DMA on the every day charts. A transparent breakout above the 200-DMA or 108 ranges may gas additional momentum within the inventory worth. On the weekly charts, the inventory is buying and selling above the 200-WMA however under the 50-WMA.

The Relative Power Index (RSI) is at 47.7. RSI under 30 is taken into account oversold and above 70 is taken into account overbought, Trendlyne knowledge confirmed. MACD is above its middle and sign line, this can be a bullish indicator.

“Firstsource answer, publish its sturdy first leg of rally from the degrees of Rs 20 to 242 in six quarters (31.03.2020-30.09.2021) corrected again to its breakout degree of Rs 95 in subsequent 4-5 quarters (31.12.2021-30.12.2022) providing an important shopping for alternative,” Sujit Deodhar, Head – Technical Analyst, Wellworth Share & Inventory Broking, mentioned.

“It may be noticed that publish promoting from increased ranges, the inventory has fashioned two Doji candles in previous two quarters indicating promoting exhaustion close to its main assist positioned at Rs 95-85 zone which can be the 61.80% retracement of its rise,” he mentioned.

“This makes the charts of FSL an important purchase with a sexy risk-reward ratio. On every day charts all its main transferring averages have fashioned a bunch which signifies {that a} large transfer is in offing,” highlights Deodhar.

“At present ranges of Rs 106 and on any dip within the assist zone of Rs 95-85 ranges this inventory qualifies for a powerful purchase with an enormous upside potential goal positioned at Rs 225 ranges, with holding interval of 5-6 quarters and a protecting cease loss under Rs 80 ranges on every day shut foundation,” he recommends.

(Disclaimer: Suggestions, solutions, views and opinions given by the specialists are their very own. These don’t characterize the views of Financial Occasions)