Paytm’s Bounce: Don’t Get Blinded by Short-Term Glitters
Paytm’s recent jump from ₹320 to nearly ₹390 has sparked excitement, but before you dive in, take a breath and zoom out. Here’s why this short-term bounce might not be the buying opportunity you think it is.
The Bigger Picture Matters: While the rise is welcome, remember the stock’s massive fall from ₹2,000 to ₹500. This recent bounce is just a blip on that larger downward trend. It hasn’t even reached key technical levels like the 50-day, 100-day, or 200-day moving averages. These are crucial indicators of long-term trends, and Paytm is far from them.
Wait for Confirmation, Not Speculation: Don’t get swayed by short-term gains, especially after a 70-90% drop. Wait for the stock to consistently trade above key moving averages and make a clear attempt at a new high. That’s when you know it’s trying to change its trajectory, not just experiencing a temporary blip.
Lollipops and Reality: Research reports touting future potential are enticing, but remember, they’re just predictions. Don’t base your investment decisions solely on future promises. Focus on the present price action and wait for concrete signs of a turnaround.
Weekly Chart Paints a Different Story: On the weekly chart, the stock is still far below its 200-day moving average, a crucial indicator of long-term support. Previous bounces haven’t gone beyond a week or two, and this one is no different. It needs to convincingly break above this level and attempt a new high for a more promising outlook.
Be Patient, Don’t Be a Falling Knife Catcher: This isn’t the time to jump in. The stock could very well drop further. There are plenty of other strong performers in the market. Wait for Paytm to prove itself through sustained price movement before considering it.
Remember: Don’t let short-term excitement cloud your judgment. Focus on the bigger picture, wait for confirmation, and prioritize your capital wisely. There will be better entry points when Paytm truly establishes a bullish trend.
WeekendInvesting Strategy Spotlight – Mi NNF 10’s impressive lead over it’s benchmark – Nifty Jnr
Mi NNF 10 has continued to be an exceptional performer for WeekendInvesting maintaining its consistent lead over the benchmark – Nifty Jnr index. Despite the short slump around Oct’22 – Jan’23, Mi NNF 10 has put on a superb recovery in FY 24 to once again claw back in to the 30%+ CAGR territory (12 Nov 2020 to 22 Feb 2024)
The important point to note is the healthy outperformed achieved by the strategy over the Nifty Jnr Index right since start.
Please write to support@weekendinvesting.com if you have any questions.
