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Shares of ITI faced significant selling pressure on December 11, falling by 7% as investors rushed to lock in profits following a strong rally
ITI shares suffer sharp decline
Shares of ITI faced significant selling pressure on December 11, falling by 7% as investors rushed to lock in profits following a strong rally in the previous three sessions. The stock had surged nearly 34% over this period, reaching a record high of Rs 404 on Tuesday, prompting traders to capitalize on the gains.
By 11:26 am, ITI shares were trading at Rs 363.80 on the NSE. Over the last three months, the stock has gained more than 24%, further attracting attention.
The company has also announced several positive developments recently, which fueled investor optimism. In early November, ITI emerged as the lowest bidder for three packages of the BharatNet Phase-3 project, worth Rs 4,559 crore. The project involves the design, construction, and maintenance of the middle-mile network under the DBOM (Design, Build, Operate, and Maintain) model, tendered by BSNL.
Later that month, ITI secured a Rs 95 crore contract from the Directorate of Geology & Mining, Uttarakhand Government, for the Mining Digital Transformation & Surveillance System (MDTSS) project. This contract involves the development, implementation, and maintenance of MDTSS across multiple districts, including Dehradun, Haridwar, Udham Singh Nagar, and Nainital, covering 40 check gates.
ITI business overview
ITI, a PSU in the telecommunications technology segment, was established in 1948. According to the company’s website, it has manufacturing facilities in Bengaluru, Naini, Rae Bareli, Mankapur, and Palakkad, an R&D centre in Bengaluru, and 25 Marketing, Services & Projects (MSP) centres in India, which are located in Bengaluru, Bhubaneshwar, Chennai, Hyderabad, Kolkata, Lucknow, Mumbai, New Delhi, and 17 other places across the country.
The company manufactures a diverse range of Information and Communication Technology (ICT) products/solutions. It is diversifying towards IOT, Smart city, and other allied telecom products and services, including turnkey project execution to offer solutions in diversified fields.
In Q2FY25, the company’s top line surged by 312.3 per cent year-on-year (YoY). The reported loss for the quarter stood at Rs 70.33 crore, down 44.19 per cent from the same period last year.
What should investors do?
Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers, underscored that the ITI share price has broken above the R3 Camarilla weekly resistance level, which is positioned around Rs 373.55, as indicated on the chart. However, for this breakout to be sustained and confirmed, the stock must achieve a weekly closing above Rs 373.55.
“At this point, it is prudent to book profits at the current price levels, given the magnitude of the recent gains and the critical importance of the weekly close above this resistance. If ITI successfully closes above Rs 373.55 on a weekly basis, it will signal further strength in the stock, with the next potential target being the R4 Camarilla resistance at Rs 442.55, offering additional upside potential. Until such confirmation is seen, caution is advised for new or additional entries,” said Patel.
According to Hardik Matalia, a derivatives analyst at Choice Broking, ITI shares price has staged a strong breakout above its 20-day, 50-day, 100-day, and 200-day EMAs (exponential moving averages). Backed by substantial volumes of 49.28 million, the stock has crossed key resistances, with the 20-day EMA at Rs 300.80 now acting as robust support.
Matalia observed that the daily chart of ITI presents a favourable outlook for the upcoming week, indicating the potential for a continued upward move.
“The stock has formed a higher high and higher low pattern, a classic sign of a sustained uptrend. The recent upward swing has successfully breached the neckline around the Rs 333 level, establishing an all-time high. This breakout signals the likelihood of a significant follow-through rally in the stock price. Adding to the bullish sentiment, the surge in trading volume reflects increasing market interest. The formation of a strong bullish candle that engulfs the preceding four months’ candles underscores the potential for continuing the uptrend,” Matalia said.
“Investors who entered at lower levels may consider a prudent approach by booking partial profits at the current market price ( Rs 395.80). Simultaneously, setting trailing stop-loss orders near the Rs 350 level can help safeguard gains and manage risk effectively. Overall, ITI’s technical structure and strong volume support suggest a promising outlook, with the potential for further gains in the near term,” said Matalia.
Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
