On October 8, 2024, shares of One97 Communications, the parent company of Paytm, surged by an impressive 15.76%. This rise marked the best single-day performance for the stock since February 2023, breaking a three-day losing streak. With this surge, Paytm's stock has not only recovered from recent losses but has also turned positive for the year, now up by 12%.
Why did Paytm stock rise?
Although the exact reason for this remarkable rally remains unclear, analysts suggest that it could be attributed to a rebound after a phase of profit-taking. The stock had been under pressure earlier this year, hitting an all-time low of ₹310 following the Reserve Bank of India's (RBI) restrictions on Paytm Payments Bank. These restrictions prevented the bank from accepting new deposits and processing credit transactions, leading to a drop in investor confidence.
However, Paytm's stock is now recovering, and some market experts are seeing potential in the company's future growth. Emkay Global, for instance, upgraded its rating for Paytm last month, raising the target price from ₹375 to ₹750, a significant increase that has caught investors' attention.
Should you buy shares online?
With the recent surge, many investors are now contemplating whether to buy shares online in Paytm. According to data from Trendlyne, analysts remain divided on the stock's outlook, with an equal number recommending "buy," "hold," and "sell" positions. This mixed sentiment indicates that while Paytm's stock is recovering, it may still face volatility in the near term.
When buying shares online, it's crucial to consider both short-term fluctuations and long-term potential. With Paytm's Relative Strength Index (RSI) at 61, the stock is approaching "overbought" territory, which could mean that a price correction is due.
Key takeaways
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