Multibagger penny stock witnesses breakout: offers high dividend yield and trades below its book value; watch out!

This penny stock has delivered multibagger returns from the low of March 2023.

Indian benchmark indices have successfully rebounded from Monday's downturn. After opening on a subdued note, the indices are now trading in the green, with the majority of sectoral indices showing positive momentum, except for Nifty Financial Services. Notably, the broader market indices have exhibited robust performance, with Nifty Mid-Cap and Small-Cap advancing by 0.75 per cent and 0.55 per cent, respectively.

Among the standout performers is Oricon Enterprises Ltd., a company engaged in the manufacturing of plastic and metal closures, PET, Preforms, collapsible tubes, and Pilfer Proof Caps in the packaging segment, along with petrochemical products. The stock surged by 14 per cent on Monday, reaching Rs 38 and marking a fresh 52-week high on the first trading session of the calendar year 2024.

Technically, it is observed that since the swing low in March 2023, the stock has comfortably maintained an upward trend, with each swing low forming a higher bottom. On the weekly chart, the stock has exhibited a breakout of an inverted head and shoulder pattern. While not a textbook-perfect pattern, it adheres to the criteria of an inverted head and shoulder pattern. Notably, the strong momentum in the stock is supported by robust volume; on the NSE, the stock recorded its highest single-day volume since November, with 31 lakh shares traded.

The weekly MACD is pointing upward and is above its nine-period average, confirming a positive bias in the stock. Additionally, the weekly 14-period RSI has generated a buy signal, moving above its nine-period average, further supporting a positive bias. The stock has the potential to test levels of Rs 44-46 in the medium term.

With an attractive dividend yield of 1.36 per cent, the stock's book value stands at Rs 72, and currently, the stock is trading below its book value. This penny stock has delivered multibagger returns from the low of March 2023.

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