Dixon Technologies Shows Signs Of Recovery: SEBI RA Recommends Buy On Dips If Stock Stays Above This Crucial Support
Synopsis
echnical indicators point to a potential trend reversal, with targets of ₹15,500–₹15,600 likely if upward momentum continues, according to the analyst.
After a challenging June, Dixon Technologies stock is showing signs of recovery, backed by key technical indicators, according to SEBI-registered analyst Deepak Pal.
Dixon shares have declined by nearly 4% over the past month.
After bottoming out at ₹13,451 on June 23, Dixon shares have seen a mild recovery. The price action suggests the stock is now entering a corrective phase, with recent candles holding above the crucial 200-day exponential moving average (EMA), a sign of underlying strength, Pal noted.
Technical indicators, such as the Parabolic SAR, moving average convergence divergence (MACD), and relative strength index (RSI), are all hinting at a potential trend reversal, the analyst said. On Friday, the stock closed at ₹14,510, above its 14-day EMA.
While some profit booking may occur around current levels, the stock is likely to find strong support near its 200-day EMA, suggesting short-term momentum is building, Pal noted.
Pal has suggested a buy-on-dip strategy from a long-term standpoint, especially if the stock remains above ₹13,900, which should also be a stop-loss price.
Should the recovery continue, the stock could retest resistance levels near ₹15,500 to ₹15,600 in the coming sessions, a 7.5% premium to the current stock price, he added.
The stock has been in the spotlight lately, after Motorola, its largest client, ended their exclusive partnership. This led brokerage firm Phillip Capital to slash its price target to ₹9,085 and maintain its ‘Sell’ rating.
However, last week, brokerage firm Nomura shared a ‘Buy’ rating on the stock and raised its target price to ₹21,409, implying a 48% upside from current levels.
Fundamentally, Dixon is in a strong position, delivering a 322% growth in Q4 net profit at ₹401 crore. The stock has a high ROE of 25–28%, low debt, and a P/E valuation of 70–90.
Retail sentiment on Stocktwits turned ‘bullish’ from ‘neutral’ a week earlier, amid ‘high’ message volumes.
Year-to-date (YTD), the stock has lost 19%.
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