Brightcom Group shares snap 4-day losing run, locked in 5% upper circuit; here's what tech charts hint

Shares of Brightcom Group Ltd paused their four-day fall in Wednesday's trade. The stock was locked in 4.97 per cent upper circuit of Rs 30 today over its previous close of Rs 28.58. Brightcom is up 76.78 per cent in the past one month. At today's high price of Rs 30, the multibagger counter has rebounded 223.63 per cent from its one-year low of Rs 9.27, a level seen on April 28, 2023, when it turned into a penny stock.

In June, the stock has traded lower in just five out of 20 sessions so far. Brightcom, which is backed by seasoned investor Shankar Sharma, has zoomed 1,400 per cent in the past five years. As of March 2023, Sharma owns a 1.24 per cent stake in the company.

Earlier this month, market regulator Sebi (Securities and Exchange Board of India) imposed a fine of Rs 40 lakh on Brightcom Group and its promoters for flouting regulatory norms related to insider trading from April 2020 to August 2021.

In response, Brightcom said, "The adjudication order pertains to a distinct and separate matter. We want to clarify that this order is based on a different show-cause notice that Sebi initiated on November 23, 2022. The adjudication order, covering the period from April 1, 2020, to August 13, 2021, addresses specific aspects such as disclosure, code of conduct, execution of trades during the trading window closure period, and contra trade."

The company further stated that it is consulting legal advisors to carefully evaluate the order and determine the appropriate steps, which may include compliance with the directives provided.

Brightcom is currently under the scanner of market regulator Sebi over concerns of irregular and incorrect filing of shareholding pattern. The company, in this regard, has also issued a lengthy clarification previously.

Bourses BSE and NSE have put the securities of Brightcom Group under the long-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

Technical analysts largely remained mixed on the counter. Support level could be seen around Rs 28.80.

VLA Ambala, Research Analyst at Stock Market Today, said, "Those who are already holding the stock and expecting more gains should place a trailing stop loss at Rs 23 for further targets between Rs 40 and Rs 65. One must understand that everyone is not holding stock with long-term view. Some of them are doing swing trading too. So, profit booking is a part of the journey and that is why pullbacks may exist."

On the other hand, Ravi Singh, Vice-President and Head of Research at Share India, said, "The stock looks strong. It can hit a target of Rs 40."

AR Ramachandran from Tips2trades said, "Brightcom Group stock price is bullish but also very overbought and has next resistance now at Rs 44.30 on the daily charts. Investors should book profits at current levels as a daily close below support of Rs 28.80 could lead to target of Rs 19 in the near term."

The counter's 14-day relative strength index (RSI) came at 63.56. 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 617.73. It has a price-to-book (P/B) value of 3.66.

The stock has a one-year beta of 1.12, indicating high volatility.

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.

Meanwhile, Indian equity benchmarks rose sharply in late deals today to touch their fresh all-time high levels. The 30-share BSE Sensex pack surged more than 600 points to hit a record high of 64,050, while the broader NSE Nifty index moved nearly 200 points higher to scale its lifetime peak 19,011.

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