The journey of this stock has been amazing; from the low point of 19 formed in March 2020 when the markets overall made their low point following the onset of the pandemic, the following months saw this stock posting fantastic returns over the coming months.  From the lows formed near the levels of 19 in March 2020, the stock rallied and marked its high point at  236 in July 2021.

This is Firstsource Solutions Limited (FSL).

The following 12 months that followed weren’t so kind for FSL. The stock, while staying in a continued corrective decline lost over 50% of its value and went on to test the low point of 93 in June 2022.

Over the past two months, the stock has been trying hard to mark a bottom for itself and put a potential base in place. The stock has formed a defined trading range and the most recent price action shows a strong attempt to break out of this formation and confirm a reversal.

The stock attempted a breakout on higher-than-average volumes. The relative strength continues to improve; this is evident from the RS line trying to reverse its trajectory. It has also crossed above the 50-period MA.

The MACD has shown a bullish crossover; it is above the signal line and in continuing buy mode. A fresh PSAR buy signal is also seen on the charts.

Importantly, the RSI has also shown a breakout from a pattern; this has occurred ahead of the actual price breakout. This is a bullish sign as RSI is a lead indicator and price tends to follow the RSI.

While making an attempt to break out and stage a reversal, the stock has also crossed above its 50-, and 100-DMA. If the breakout continues and if the price moves in the intended direction, it may go on and may test the levels of 200-DMA; the 200-DMA is currently placed at 129.33. 

Although the current price action triggers a fresh entry point in the stock, any close below 101 would act as a stop-loss for this trade.

Foram Chheda, CMT