Persistent Systems below QIP floor price, rising wedge forms

Persistent Systems closed at Rs 5,727.50, below its Rs 5,761 QIP floor price, with support at Rs 5,162 and resistance at Rs 6,078. Persistent Systems Limited [

] ended the week to 23 October at Rs 5,727.50, down 0.23% on the day. The close is slightly below the Rs 5,761 floor price of its qualified institutions placement, which opened on 21 October. The QIP aims to raise up to $450 million, about Rs 4,265 crore, to partly fund the proposed Nagarro acquisition. The floor price was revised from Rs 5,550, and a discount of up to 5% is allowed. Fresh shares add supply and dilute existing holders, so the final issue price needs watching. The stock also lagged the Nifty IT index, which rose over 15% in October. The daily chart shows a rising wedge, a pattern where higher highs and higher lows converge and which often resolves lower. Resistance is Rs 6,078 and support is Rs 5,162. A close below the lower wedge line, and then below Rs 5,162, would confirm a breakdown. A close above Rs 6,078 would break the pattern upward and cancel the bearish reading. RSI is 54.35, below its average of 58.30, so near-term momentum is soft. Disclosure: I do not hold any position in this stock. This is not a recommendation to buy or sell. Investments in securities markets are subject to market risks. Read all related documents carefully before investing.