Although the penny stock space is not for everyone as it contains relatively higher amounts of risks, those who are aggressive in their trading style and know how to manage their downside can have a look at Take Solutions Ltd (NS:).

It is an IT company that provides technology-based solutions to various business verticals and has a market capitalization of only INR 264 crore. Because of such a small size, the volatility of this counter is high, roughly around 3.63x of the index. It is a loss-making entity on an annualized basis so therefore nothing much is there to talk on the fundamental ground, however, when looking at the daily chart structure of it, the stock seems to hold some upside potential.

Image Description: Daily chart of Take Solutions with volume bars at the bottom

Image Source: Investing.com

Because of a good bidding war in today’s session, the stock rallied over 4.48% to INR 18.7 and broke above its falling trendline resistance on the daily time frame. The volume backing today’s surge has been reported at around 609K shares so far, which is 278% higher than the 10-day average volume of 161K shares. I generally look for a volume expansion of over 300% on the breakout day, but as there are still a few hours left for today’s close, this threshold might be reached.

As this is a micro-cap company, traders can expect a sharp move till the next resistance of INR 20.8. This is the swing high marked on 8 May 2023. The current small base from where the stock is rising can be looked upon as a decent support level, which is around 17.

The stock is quite beaten-down and did not participate in the broader market rally, which is fine as micro-caps have very less correlation with the broader markets. But now, as the stock is comfortably trading above its 50-day simple moving average (SMA) which denotes a medium-term trend, it might attempt to cheer investors this time.

Read More: How Many Shares to Buy When Trading? Here’s a Brief