Cognizant is one of the most recognized IT services firm in the world. The company has built up expertise in technologies like artificial intelligence which will be crucial in the digital transformation of businesses globally. Cognizant has a strong brand, strong balance sheet, and its solutions have a high switching cost. These factors bode well for the company from a long-term growth perspective.
The 10-year monthly chart for Cognizant shows a steady uptrend that reached its peak in 2018. Since 2019, however, prices have been falling and they hit a low in March 2020. The price fell by 50% in about 15 months, went below a historic support level at $57 and briefly below the bottom of the long-term trend.
However, since April, the trend reversed and prices gained by about 38%. The price breached the $57 support zone which could have acted as a resistance. The initial target price now looks to be around the $72 mark and then the $82 level. Stop loss can be placed at $52, which is below the support zone.
Position taken today at $63.44 with stop loss 18% below at $52. Medium term take profit set at $96 giving a return of 51%
On the video and images above you will see the reason this stock was selected.
You will see the image is of a monthly chart of the stock showing the long-term upwards trend formed over the years. You will also see the entry point and the where the stop loss is placed. For more information please watch the video given.
Once it is time to move the original stop loss up you will see an additional image.