Stock watch: Astra Micro breaks out from consolidation

Astra Microwave Products Limited gives a channel breakout on daily charts.

Astra Microwave Products Ltd design, develop and manufacture sub-systems for radiofrequency and microwave systems which are particularly used in defence, space, meteorology and telecommunications.

In Q1 FY22 the company reported a net profit of Rs 9.66 crore as against a net loss of Rs 83 lakh reported in the same quarter last year. The company’s revenue jumped by 23 per cent to Rs 120 crore compared to Rs 97 crore in Q1 FY21. Astra Micro is expected to release its Q2 FY22 earnings on November 1, 2021.

Looking at its last one-year performance, this small-cap stock has surged almost 131 per cent, whereas Nifty Small Cap 100 Total Returns Index (TRI) jumped 87 per cent. In the last one and a half year, Astra Micro has soared fourfold. Post making such a phenomenal rally, the stock entered into a consolidation for 22 trading sessions before breaking out on the daily charts. This breakout was strongly supported by the rising volumes. 

Above is the daily chart of Astra Microwave Products Ltd. 

Relative Strength Index (RSI), is showing a negative divergence during the last 23 trading sessions. The stock’s RSI is presently trading at 66 level which is above its 20-Day Exponential Moving Average (EMA). On the flipside, Moving Average Convergence Divergence (MACD) is supporting this breakout as it witnessed a positive crossover in the positive territory.

At present, stock’s immediate support is placed at 214 levels, whereas the 234.35-238.30 zone would act as its immediate resistance. In the current scenario, it is sensible to invest in a pullback. In fact, in today’s trade, we do see the stock price moving down from the day’s high as well as the previous day close.

At the time of writing Astra Microwave Products Ltd. was trading at 225.90.