Short term traders can look to buy the stock on marginal fall for a target above Rs 1300 levels, suggest experts. The stock closed at Rs 1136 on 31 October 2023.
Newgen Software stock which is also part of the S&P BSE Sensex hit a record high of Rs 1233 on 27 October 2023, but it failed to hold on to the momentum and witnessed marginal decline.
The stock after consolidating in a narrow band of 200 where 1000 acted as a strong resistance and on the downside 800 acted as a crucial support since July 2023 witnessed a breakout above earlier in October 2023.
The stock is in an uptrend despite some selloff seen in the benchmark indices. The stock rose from Rs 900 as of 29th September to Rs 1125 recorded on 31st October 2023 — which translates into an upside of over 25% in a month.
In terms of price action, the stock is trading below 5-DMA but above 10,30,50, 100 and 200-DMA, Trendlyne data showed.
The daily Relative Strength Index (RSI) is placed at 67.2. RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed. The daily MACD is above its center and signal Line, this is a bullish indicator.
“Newgen’s stock is currently tracing an ascending channel, underscoring a healthy underlying upward trend. Trading at its All-time high, NEWGEN’s trajectory exudes strong bullish sentiment,” Omkar Patil, Technical Research Associate at GEPL Capital, said.
“Emerging from a shallow consolidation phase, the stock signals the onset of an upward trend. With the stock prices sustaining above the 12-week EMA, this further solidifies the bullish inclination,” he said.
“Furthermore, the RSI on the weekly chart has shown a hidden bullish divergence reflecting presence of positive momentum,” highlights Patil.
“Going ahead, we expect the prices to move higher till 1390 level where the stop loss must be 1140 strictly on the closing basis,” he recommends.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)