Chart Examine: 140% in a 12 months! Uptrend intact on this commodity chemical firm

Deepak Fertiliser and Petrochemical Firm, a part of the commodity chemical area, hit a contemporary file excessive in October 2022 however technical indicators counsel that the rally shouldn’t be over but.

The inventory with a market capitalisation of greater than Rs 13000 crore hit a file excessive of Rs 1,061 on twenty first October 2022. The inventory has been in a gradual uptrend up to now one 12 months.

It rose greater than 15% in every week, and greater than 50% in 3 months. From a 1-year perspective, it rallied greater than 140%.

Monitoring the momentum, costs gave a breakout from a pennant sample indicating the continuation of the prior uptrend.

Costs within the newest week have given a breakout of the pennant sample indicating a continuation of the prior uptrend. A pennant is just like a symmetrical triangle. It’s a continuation sample and is accomplished in a a lot smaller timeframe, say 10-15 days.
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The steep rise seen within the inventory pushed it in the direction of overbought ranges; therefore, some consolidation within the brief time period can’t be dominated out. Brief-term merchants can look to purchase the sock on dips for a goal of Rs 1400 within the subsequent 3-4 months, counsel specialists.

The relative power index or the RSI on the weekly timeframe is rising. The inventory additionally broke out from a 200-point consolidation earlier in October the place Rs 1,000 acted as stiff resistance whereas Rs 800 acted as a help on each day charts.

RSI is at 71.6. RSI above 70 is taken into account overbought. This means that the inventory might present a pullback. MACD is above its middle and sign Line, it is a bullish indicator.

The supertrend indicator additionally triggered a purchase on each day charts on 17 October. Volumes are rising which signified power within the pattern.

On the value entrance, the inventory worth is buying and selling above a lot of the essential short- and long-term shifting averages of 5,10,30,50,100, and 200-DMA which is a constructive signal for the bulls.

“Whereas wanting on the broader image of we will spot that the steepness of the Trendline is rising which signifies acceleration within the present uptrend,” Patil, Technical Analysis Affiliate at GEPL Capital, mentioned.

Volumes are rising steadily with the established underlying uptrend, suggesting that the Demand is pushing costs larger. “Costs within the newest week have given a breakout of pennant sample indicating continuation of the prior uptrend,” he mentioned.

Inventory has discovered instant help on each dip both from 13-week EMA or the accelerating pattern line.

The hole fashioned within the first week of August 2022 stays unfilled until date, indicated as a breakaway hole that normally varieties at first of the pattern.

“Trying on the ratio charts versus Nifty, Deepak Fertilisers also can keep its outperformance from the present stage. RSI Plotted on the weekly timeframe is rising and have proven a range-shift reflecting rising momentum within the inventory,” added Patil.

“Going forward, we count on the costs to maneuver larger until the extent of 1400 in subsequent few months, the place the cease loss should be Rs 880 strictly on the closing foundation,” he recommends.

(Disclaimer: Suggestions, recommendations, views and opinions given by the specialists are their very own. These don’t characterize the views of Financial Occasions)