Paytm stock jumps over 10 per cent; is it a dead cat bounce or a trend reversal?
However, lately, the stock has been in the news for all the wrong reasons.
The share of One97 Communications, the parent company of digital payments major Paytm, has been on a downward spiral since its listing day. However, lately, the stock has been in the news for all the wrong reasons.
The stock made its debut on NSE at a 9 per cent discount to Rs 1,950 per share against its issue price of Rs 2,150. It has plummeted nearly 73.4 per cent from its listing day high of Rs 1,955 to the low of Rs 521, which was registered on March 23, 2022.
Recently, the exchange had sought clarification from One97 Communications with reference to significant movement in price as the stock has come to a fourth of the IPO price. In a statement to the exchange, the company clarified, “We would like to reiterate that the company is committed to comply with the listing regulations and any information/announcement, likely to have bearing on the price/volume of the shares of the company would be disclosed, from time to time, to the stock exchanges within the stipulated timeline.”
However, as the saying goes, ‘every bad day has an end’, the same is turning true for this stock since it jumped more than 10 per cent on a day when the markets are trading in red!
The stock opened around the level of Rs 522 and made a high of Rs 592. In technical parlance, it has formed a bullish engulfing candlestick pattern but if the stock manages to close above the level of Rs 552, as there are still three hours left for the market to close, it would be a bullish engulfing pattern. Moreover, the volume witnessed in the stock is higher than its previous trading session.
From a technical standpoint, the landscape of the stock would improve considerably only if it closes above its biggest hurdle at Rs 595-Rs 600. As long as it stays below this level, the rally in the stock would be considered as a dead cat bounce in the stock!