In the midst of many breakouts, one stock that stood out on Tuesday was 63 Moons Technologies Ltd (NS:). It is an IT company that provides software and related consultancy services, having a market capitalization of INR 1,062 crore.
The stock attracted a lot of attention today as heavy demand led it to surge and it locked in at an upper circuit of 10% to INR 253.6. Prior to this circuit, the stock had been rallying sharply since the last week of June 2023. However, the rally topped out at INR 282.1 in mid-July 2023, and due to profit booking, the stock kept declining up until yesterday.
Image Description: Daily chart of 63 Moons Technologies
Image Source: Investing.com
This retracement on the downside took the form of a small downward-sloping channel which indicates a southward direction of the stock. When such channels are breached on either side, a trend is expected to continue in that direction.
In the case of 63 Moons, the stock sliced through the upper trendline resistance and therefore a bullish trajectory is expected in the near future. The volume on this breakout day was also high, at over 642.3K shares, which is 399% higher than the 10-day average of 642.3K.
Looking at the strength of the rally, it looks like the stock might easily scale to the immediate swing high of INR 282. However, the rally might not stop there and above this high, investors might see even better levels to liquidate their holdings.
To manage the risk, a stop loss below the swing low of INR 223 can be placed.