Check the chart: After 30% in a month, should investors buy, sell or hold this small cap stock?

part of the capital goods sector, which rallied more than 30% last month to hit a new 52-week high in January 2023, but technical indicators suggest the bull run may not be over.

Shares in the S&P BSE Smallcap Index rose from Rs 450 on December 23, 2022 to Rs 619 recorded on January 23, 2023, representing an increase of 38%.

The small cap stock hit a new 52-week high of Rs 628 on Jan 19, 2023. It has gained more than 4% in a week and over 40% in the past 3 months.

Recent price action has helped the stock break out of the pennant formed on the weekly chart. Pennant is similar to a symmetrical triangle but with a few differences.

A pennant is usually formed on a much smaller time frame, such as 10-15 days. Pennants can be created by a simple convergence of straight lines that match the highs and lows of intermediate bars. also read

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In terms of price action, the stock is trading well above most of the important short-term and long-term moving averages like the 5,10,30,50,100 and 200-DMA, which is a positive sign for the bulls. price speculation up.

The Relative Strength Index (RSI) is at 73.4. RSI above 70 is considered overbought. This implies that the stock may show a pullback. MACD located above the center line and the signal line, this is a bullish indicator.

“Surya Roshni share price started to rise from Rs 60 (April 2020) to Rs 861 (October 2021), creating a series of higher highs and higher lows, supported by volume,” said Bharat. Gala, President – Engineering Research,

Securities said.

“During the move, the stock consistently traded above average. The stock was then corrected to Rs 333 in August 2022. The stock traded in a range (Rs 300-600) from November 2021 to December 2022 and recently formed four Positive weekly candles,” he said.

“A breakout of the Pennant pattern can be seen in stocks. The stock recently hit a high of Rs 629, above its recent high. The Aroon Up/Down, MACD & KST indicators show buying power for stocks,” Gala emphasized.

“The targets could be Rs 800-1,000. If the stock price corrects down, the buy levels are Rs 585-558-537-515-503. He recommends a stop loss in the trade of Rs 480.

(Disclaimer: Recommendations, suggestions, views and opinions expressed by experts are their own. These do not represent the views of The Economic Times. )


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