Tejas Networks nears breakout point amid market correction; do you hold it?

In weak market conditions, Tejas Networks Ltd, a key player in the telecom equipment sector, is poised to make a significant move. The company, renowned for its telecom solutions, is on the verge of breaking out from a continuation pattern, with its stock closing just under the breakout trendline level.

Headquartered in India, Tejas Networks Ltd is a globally recognised telecom equipment company with a strong focus on research and development. It designs, manufactures, and develops cutting-edge optical and data networking products utilised by telecom service providers, government agencies, defence networks, and utilities.

Operating across different regions including India, the Americas, and the Rest of the World, Tejas Networks Ltd specializes in communication equipment solutions. Its portfolio includes offerings like the carrier of carriers, mobile backhaul, broadband access, data centre interconnect, and utility communications. Established on April 24, 2000, by Sanjay Nayak, Gururaj Deshpande, Kumar N. Sivarajan, and Arnob Roy, the company has its headquarters in Bangalore, India.

From a technical perspective, Tejas Networks Ltd’s stock has been consolidating within a significant price range of Rs 893.30 to Rs 768.05. A thorough analysis of price movements, connecting the peak points of mid-July 2023 (Rs 893.30 level) and mid-August 2023 (Rs 865 level) on the daily chart, reveals the emergence of a breakout trendline from a continuation price pattern. The recent consolidation phase gains further strength from a bullish golden crossover involving the 5-13-26 DMA, coupled with the 14-day RSI hovering around 58.26 in the bullish zone.

Notably, the stock is currently trading slightly below the trendline of the mentioned pattern but is supported by the 26 DMA. To confirm the breakout, the stock needs to consistently close above the breakout trendline level (Rs 860) on a daily basis.

Interestingly, the stock hit an intraday peak of Rs 860 in today’s trading session, showcasing its resilience and fueling investor optimism. With the breakout underway, the stock is eyeing a potential target of around Rs 1030, indicating a potential gain of over 20% from the breakout point. For short-term traders and investors, vigilant monitoring of the stock is recommended, given its consistent and impressive performance. The unfolding scenario presents a compelling opportunity for further upward movement.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.