Semiconductor firm MosChip stock up 150% in June; will the rally continue?

MosChip hit a new all-time high at Rs 320.80 on Friday June 21. The stock may witness some consolidation in the near-term, post which a rally to Rs 395 levels seems possible, chart shows.

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Shares of this semiconductor (MosChip Technologies) stock zoomed over 148 per cent so far in June 2024 to hit a new high of Rs 320.80 on Friday, June 21, 2024. The stock eventually ended 5 per cent lower at Rs 281 on Friday on account of profit-taking following the stupendous rally.

MosChip Technologies, semiconductor and system design services company, stock has soared over 200 per cent so far in this quarter. In comparison, the NSE Nifty 50 index has gained 5.3 per cent in the same period.

The recent sharp rally at the counter has been attributed to approval of the company's application under the Semiconductor Design-Linked Incentive (DLI) scheme.

The Ministry of Electronics and Information Technology, Government of India (MeitY) approved Moshcip's application under the Government of India's Semiconductor Design-Linked Incentive (DLI) scheme for the development of a smart energy meter IC for India and overseas markets.

The Design Linked Incentive (DLI) scheme aims to offer financial incentives over a period of 5 years. READ MORE

Meanwhile, on the earnings front, MosChip Technologies has reported a sharp fall in Q4 net profit to Rs 1.10 lakh for the quarter ended March 2024 when compared with Rs 21.60 lakh in the corresponding quarter a year ago. Revenue from operations, however, grew by 17.3 per cent year-on-year (YoY) to Rs 5.31 crore from Rs 4.53 crore in the same period.

Against this background, here's an outlook on the MosChip stock for the likely trend ahead.

MosChip Technologies

Last close: Rs 281

Upside Potential: 40.5%

Support: Rs 277; Rs 235

Resistance: Rs 320; Rs 330

The stock is trading on a buoyant note on multiple time-frames. The short-term chart suggests that the bias is likely to remain bullish as long as the stock continues to trade above Rs 277. Whereas; in the long-term the bias for the stock is likely to remain positive as long as it sustains above Rs 235 levels.

Given the overbought conditions, across time-frames, the stock may consolidate in the near-term and in the process may test the anticipated support levels. Post which, the stock may attempt to resume its uptrend and target Rs 370 - Rs 395 on the higher side. Interim resistance can be expected around Rs 320 - Rs 330 levels.