Berger Paints, Persistent: 5 oversold stocks that can bounce back up to 10%

HDFC Life, CoForge and Syngene are the other 3 stocks trading in oversold zone; Technically a RSI reading below 30 on the charts is considered oversold; here are the key levels.

Stock markets have turned volatile off late on the back of high equity valuation worries coupled with persistent FII selling and election jitters. The NSE Nifty 50 dipped 3.3 per cent from its all-time high of 22,795 hit earlier this month.

Meanwhile, the broader Nifty 500 index fell 3.5 per cent in the same period, despite Friday's pullback.

Amid this fall, quite a few stocks have entered oversold zone on the charts. Technically, RSI (Relative Strength Index) - a key momentum oscillator - reading helps in determining overbought and oversold stocks. 

The 14-day is plotted taking into consideration the price action of the underlying index/ stock in the last 14 trading sessions. For instance, if the stock has risen in the last 14 days, the 14-day RSI will read 100, whereas in case of the reverse the RSI will read 0.

Technically, a RSI reading above 70 is considered overbought, while a reading below 30 is considered as oversold. Stocks trading or exiting from oversold zone, necessarily does not indicate a reversal in trend, but can offer opportunities for booking minor gains or exiting stuck positions.

We have handpicked five such stocks, whose RSI at present or recently dipped below the 30-mark and are showing signs of a potential pullback from oversold zone.

Berger Paints

Last close: Rs 490

Upside Potential: 7.3%

Support: Rs 470

Resistance: Rs 517

Berger Paints stock has been in a downtrend since September 2023, wherein the stock has shed 26 per cent in this period. The 14-day RSI reading for the stock currently stands at 32 level, having recovered a wee bit from oversold zone. Other key momentum oscillators like the MACD (Moving Average Convergence-Divergence) and Slow Stochastic too are showing some signs of likely reversal.

As such, the stock is expected to find support around Rs 470-odd levels. On the upside, the stock can potentially bounce back to Rs 525 levels, with interim resistance seen at Rs 517. CLICK HERE FOR THE CHART

CoForge

Last close: Rs 4,465

Upside Potential: 9.3%

Support: Rs 4,287

Resistance: Rs 4,720

CoForge stock has witnessed a steep fall of over 37 per cent in the less than 3-month period. Earlier this month, the stock witnessed a sharp gap-down, following which the RSI entered oversold zone. The 14-day RSI still reads at 26 levels, indicating oversold. However, a positive divergence is visible on the RSI and Slow Stochastic indicator.

As such, the recent low at Rs 4,287 becomes the key support for the stock going ahead. On the upside, the stock can potentially jump to Rs 4,880 levels, provided the hurdle at Rs 4,720 is taken out. CLICK HERE FOR THE CHART

HDFC Life

Last close: Rs 548

Upside Potential: 5.8%

Support: Rs 538

Resistance: Rs 570

HDFC Life stock declined over 15 per cent in the last one month. A relief rally at the counter can be expected as long as the recent low of Rs 538 holds. In which case, the stock can potentially bounce back to Rs 580 levels, with interim resistance seen at Rs 570. CLICK HERE FOR THE CHART

Syngene

Last close: Rs 667

Upside Potential: 9.9%

Support: Rs 650

Resistance: Rs 680

Syngene stock is seen trading sideways, with the stock making similar highs and lower lows in the last seven months. As such, the stock recently made a lower low at Rs 650, and the bounced back on Friday. In the near-term the stock may attempt to bounce back towards its short-term moving average 20-DMA (Daily Moving Average) at Rs 719 or higher to Rs 733.

Interim resistance for the stock can be expected around Rs 680 levels. On the downside, Rs 650 can be expected to provide support for now. CLICK HERE FOR THE CHART

Persistent Systems

Last close: Rs 3,367

Upside Potential: 10.6%

Support: Rs 3,323; Rs 3,254

Resistance: Rs 3,565; Rs 3,600

Persistent Systems stock has been consolidating around its 200-DMA for more than a week now. On May 10, Friday, the stock broke below the long-term moving average in intra-day deals, but managed to close above it. In doing so, key momentum oscillators such as the RSI, MACD and Slow Stochastic have given a positive divergence on the daily chart. 

Hence, the stock is likely to attempt pullback from current levels in the coming trading sessions. The 200-DMA support stands at Rs 3,323, below which the stock may seek support around its recent low at Rs 3,254. On the upside, the stock can bounce back towards Rs 3,725, with interim resistance seen around Rs 3,565 and Rs 3,600 levels. CLICK HERE FOR THE CHART