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Paytm (NS:) is one stock that has been buzzing for the last few sessions. The company recently came out with its Q3 FY23 earnings report which surprised the street as it reported its first-ever quarterly operating profit, three quarters ahead of its guidance. It also noticeably narrowed its net loss to INR 392 crores, compared to INR 778.4 crores in the same period last year.
The better-than-expected results triggered a bidding war among investors leading Paytm shares to surge over a whopping 40% this week to a high of INR 738.7. The volume for the week has been recorded at 159.6 million shares which is the highest one-week volume in the history of its listing. This massive demand on the back of turn-around Q3 FY23 numbers seems to be changing the trajectory of the stock, finally.
Image Description: Daily chart of Paytm with volume bars at the bottom
Image Source: Investing.com
On Friday, the stock took a decent hit of around 7.85% to INR 650.55, giving a good opportunity to investors to lap up the company’s shares. However, is it the right level for investors to participate in the rally or should they wait for a further dip?
Well, this week’s rally had been quite sharp so waiting for a correction was already a good idea for left-out traders/investors. However, the sentiments seem hot right now, and waiting for a further dip might be the right choice. The stock has already retraced more than 38.2% from this rally’s high but there seems to be more scope left till an important Fibonacci level of 60.8% which comes at around INR 605.
Looking at the daily chart of Paytm, there is good support around INR 585. This is the previous level which worked as resistance and now as the stock is falling from a higher level, this would now be working as support. So, despite an 8% drop in today’s session, there’s still some scope left on the downside.
Coming to how far the stock can move on the upside, well after hitting the first profit at the operating level, it seems like the stock has bottomed out near INR 440. After retracing to the support level, there is a possibility of shooting back to INR 740 which has now become a good resistance level. There is also a trendline breakout seen on the daily chart on 6 February 2023 which has made the whole picture quite bullish, despite the ongoing correction.
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