Investors with a medium-term perspective can buy the stock of PTC India at current levels. The stock had encountered a key resistance at around ₹130 in October 2017 and was on a long-term downtrend until it recorded a multi-year low at ₹32.4 in March 2020.
Subsequently, the stock changed direction, triggered by positive divergence in the weekly relative strength index, and started to trend upwards.
Since March 2020 low, the stock has been in an intermediate-term uptrend, forming higher peaks and higher troughs.
There is a formation of an inverse head and shoulders pattern visible on the weekly chart between October 2020 and February 2021 with a neckline at around ₹60 which is a bullish reversal pattern. The stock tested this neckline for almost a month before decisively breaking through it in early February with good volumes. Thereafter the stock accelerated and continued to trend upwards.
It has been in a short-term uptrend since early February and trades well above the 21- as well as 50-day moving averages.
There has been an increase in weekly volumes over the past five weeks backing the stock’s on-going up-move. Last week, the stock advanced 5.9 per cent, extending the rally.
The daily relative strength index features in the bullish zone and the weekly RSI is slightly hovering in the overbought territory indicating a minor corrective decline is possible.
But the stock has shown strength in the recent times by bouncing back after such corrective dips. Further, the daily as well as the weekly price rate of change indicators are hovering in the positive terrain, implying buying interest.
Overall, the medium-term outlook is bullish for the stock PTC India. Targets are ₹88 and ₹96 with a minor pause at around ₹88. Traders with a medium term view can buy with a stop-loss at ₹71.