LIC-backed small-cap stock below Rs 150: Potential for 25 per cent up-move; one of leading supplier of motors to EV and cater to renewable energy sector

Catering to core economic sectors such as power generation, transmission & distribution, transportation, and renewable energy, to name a few. It is one of the leading manufacturers and suppliers of motors that are used in electric vehicles.

Following an exhilarating surge on Monday, the Indian benchmark indices are presently experiencing a momentary pause, exhibiting almost negligible fluctuations. Nonetheless, the market's vibrancy persists within the Mid-Cap and Small-Cap segments, with the small-cap index witnessing an impressive surge of nearly 1 per cent on Tuesday.

Amidst the small-cap fray, Kirloskar Electric Company Ltd stands out as a noteworthy contender, commanding attention on the stock exchanges with a remarkable 15 per cent uptick. This surge is underscored by the highest single-day trading volume since April of the previous year, propelling the stock to attain a fresh 52-week high.

Technically dissecting the situation, the stock has achieved a resolute breakout from a 30-week long consolidation, adopting a pattern reminiscent of a rectangle. A rectangle, in the realm of chart patterns, signifies a phase of consolidation in the asset's price movement. This pattern materializes as the price fluctuates between parallel support and resistance levels, forming a distinct rectangular shape on the chart. The breakout is accentuated by a robust volume, nearly tenfold the 30-day average volume of 7 lakhs shares per day, indicative of heightened participation aligning with the prevailing trend.

Furthermore, the daily Moving Average Convergence Divergence (MACD) is on an upward trajectory, rebounding with support at its nine-period average, reinforcing the positive sentiment surrounding the stock. Among the oscillators, the daily 14-period Relative Strength Index (RSI) is exhibiting a robust upward movement, consistently maintaining a position above its nine-period average, further substantiating the optimistic outlook.

Delving into pattern analysis, a well-defined principle pertains to the minimum target of rectangle trades. This implies that the range between the support and resistance levels of the rectangle should be applied on the chart from the breakout juncture. Consequently, the anticipated target for this stock stands at an impressive 27 per cent. As such, both swing traders and investors are advised to include this stock in their watchlist, given its potential for substantial growth.

Life Insurance Corporation of India (LIC) holds 8,34,457 shares of the stock and the company produces more than 70 products under eight product groups.  Catering to core economic sectors such as power generation, transmission & distribution, transportation, and renewable energy, to name a few. It is one of the leading manufacturers and suppliers of motors that are used in electric vehicles.

Disclaimer: The article is for informational purposes only and not investment advice