This midcap IT company has acquired Technica Group for Rs 640 crore; do you hold it?

KPIT Technologies has soared over 3% during the initial hours of Tuesday’s trading session.

Despite the broader market being infused with huge volatility in recent times, it has not stopped stock-specific action on D-street. The shares of KPIT Technologies have jumped over 3% during Tuesday’s trading session backed by good volume. Interestingly, it has soared over 17% from its recent swing low of Rs 557 level. Last week, it has registered a price volume breakout from its 24-week cup pattern. Moreover, on the daily timeframe, the stock has formed higher highs and higher lows, which is a sign of positivity. It trades above all its key moving averages, which justifies strong buying interest in the stock. It is currently about 10% above its 20-DMA, while it is about 17% above its 200-DMA.

Recently, the company has acquired 4 Technica group companies for Rs 640 crore. These entities have strong presence across Europe and works in the domain of automobile systems, ethernet products and prototyping. This acquisition is likely to benefit the company in a longer run.

From the technical analysis perspective, the stock possesses strong strength. The 14-period daily RSI (67.84) is in the bullish zone and shows bullishness. The ADX (20.77) is in an uptrend and demonstrates stronger trend strength. The MACD is largely positive from the past few days. The OBV is rising and shows active buying interest in the stock. In the past 3 months, the stock has bounced over 30%. Overall, the stock is technically strong and is expected to trade higher in times to come.

Swing traders as well as medium-term investors have a good opportunity as the stock shows strong signs of bullishness. One can consider including it in their watchlist to track its further progress.  

KPIT Technologies is engaged in computer programming, consultancy, and allied businesses. Currently, the shares of KPIT Technologies are trading around Rs 665 levels on NSE.