Rs. 8,677 crore order book: Tata Group stock records a breakout from a 14-month consolidation, with m-cap crossing the Rs. 30,000 crore milestone; is a four-figure mark likely before the year-end?

The rectangle pattern is supported by strong volume, almost twice the 30-week average volume of 61.97 lakhs shares per week

The achievement of fresh all-time highs has become the new norm for the Indian benchmark indices, with the NSE benchmark Nifty 50 reaching a new pinnacle on Wednesday at 21,593. Currently, it is trading higher by 0.51 percent at 21,561. The broader market indices are abuzz, with Nifty Mid-Cap and Small-Cap advancing higher by 0.83 and 0.77 percent, respectively. The advance-decline ratio strongly favors advances, with 1400 stocks trading in the green on NSE.

Amidst this buoyancy, one stock from the Tata group stands out, flourishing like a cool breeze, leading India’s air conditioning market for several years. The stock in focus is Voltas Ltd.

Voltas has embarked on an eventful journey since its establishment in 1954 through a partnership between TATA Sons and Volkart Brothers. As India’s leading air conditioning company, Voltas provides intelligent solutions for Air Conditioning and Cooling Products (Unitary Cooling Products), Engineering Projects, and Engineering Products & Services.

On Tuesday, the stock surged nearly 6 per cent, reaching a 52-week high of Rs 954.95 on BSE. With this strong move, the stock witnessed a breakout of a 14-month-long rectangle pattern on the weekly chart. The rectangle pattern, characterized by two horizontal trend lines drawn across a series of price peaks and valleys, forms a rectangle shape on a stock chart. The breakout above the rectangle pattern is supported by strong volume, almost twice the 30-week average volume of 61.97 lakhs shares per week, highlighting larger participation in the direction of the trend. This breakout occurred mid-way through the week.

The weekly MACD has generated a bullish crossover, validating the positive bias. The weekly RSI has also generated a bullish crossover recently and is in a rising trajectory, further validating the positive bias. The trend strength indicator, Average Directional Index (ADX), stands at 17.5, indicating strength, and it is in an uptrending mode. The +DI is significantly above the -DI and ADX, a bullish sign for the stock. On the upside, the stock may test the level of Rs 1065, and with its solid up-move on Tuesday, it has crossed the Rs 30,000 crore market cap.

In Electromechanical Projects and Services, the total carry-forward order book of the segment stood at Rs. 8,677 crores, compared to Rs. 5,496 crores of outstanding orders as of 30th September 2022.

Voltas is indeed a stock to keep on the radar for swing trading.

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