Brightcom Group shares jump 13%; what's next on technical charts?

Shares of Brightcom Group Ltd rose sharply in Wednesday's trade. The stock today surged 12.60 per cent to hit a day high of Rs 21.99. At this price, the scrip has declined 40.28 per cent from its one-year high of Rs 36.82, a level seen on June 22, 2023. Despite the said drop, the multibagger counter has gained 137.22 per cent from its 52-week low price of Rs 9.27, hit on April 28 last year when it turned into a penny stock.

Brightcom witnessed heavy trading volumes today as 1.92 crore shares were last seen changing hands on BSE. The figure was way more than the two-week average volume of 46.83 lakh shares.

Turnover on the counter stood at Rs 40.18 crore, commanding a market capitalisation (m-cap) of Rs 4,296.16 crore. There were 39,12,385 sell orders against buy orders of 14,13,353 shares.

On technical setup, support could be seen at Rs 19.5, followed by Rs 18 level. On the higher side, a decisive breakout above Rs 23 is required for a further upward move.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Support will be at Rs 18 and resistance at Rs 23. A decisive close above Rs 23 level may trigger a further up move towards Rs 27. Expected trading range will be between Rs 17 and Rs 30 for a month."

AR Ramachandran from Tips2trades said, "Brightcom Group looks bullish on daily charts and a daily close above resistance of Rs 22.65 could lead to targets of Rs 25.65-30 in the near term. Support will be at Rs 19.5."

DRS Finvest founder Ravi Singh said that the stock is looking strong on charts and may see Rs 25 level in the near term. Keep stop loss placed at Rs 18, Singh mentioned.

The counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-, 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 67.63. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 217.96 against a price-to-book (P/B) value of 2.50.

Brightcom is backed by seasoned investor Shankar Sharma. It has zoomed over 1,250 per cent in the past five years. As of September 2023, Sharma owns a 1.14 per cent stake in the company. He has been restricted by markets regulator Sebi from selling shares.

Recently, Vijay Kancharla has tendered his resignation as executive director of the company.

Last year, the counter saw heavy selling pressure after the company's chairman and managing director (CMD) Suresh Kumar Reddy, along with chief financial officer (CFO) SL Narayana Raju, resigned following a Sebi order. The Securities and Exchange Board of India (Sebi) had restrained Reddy and Raju from holding any directorial positions.

The group consolidates ad-tech, new media and IoT (Internet of Things) based businesses across the globe, primarily in the digital eco-system. Brightcom's consumer products division is focused on IoT. The company has a presence in the US, Israel, Latin America ME, Western Europe and Asia Pacific regions.

(Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)

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