Swing Trading: Bottom formed in this ethanol stock targeting 3x revenue growth; mutual funds added 20,42,816 shares of this stock!

Since its March 2023 lows, the stock has soared by nearly 118 per cent, reaching a high of Rs 650.50 within 35 weeks

On Wednesday, the Nifty 50 index on the NSE displayed a second successive bullish candle, followed by a Thursday session opening with a gap-up, currently trading marginally higher. Notably, broader market indices, with the Nifty Mid-Cap and Small-Cap, are showing signs of buying interest, up by 0.91 per cent and 1.33 per cent respectively.

As broader markets gain traction, individual stock movements continue to intrigue, with Praj Industries Ltd emerging as an enticing prospect for swing trading opportunities. On Thursday, the stock surged approximately 2.5 per cent, hovering around Rs 510. Since its March 2023 lows, the stock has soared by nearly 118 per cent, reaching a high of Rs 650.50 within 35 weeks. Subsequently, it underwent a corrective phase, retracing about 50 per cent of the upward move from March 2023 lows to December 2023 highs. Interestingly, during this correction, the stock avoided entering oversold territory, bouncing from the 41 level. This shallow retracement signifies a potential formation of a higher base and a positive price structure.

Analyzing the daily timeframe, Praj Industries has formed a double-bottom-like pattern, with the neckline positioned around Rs 517. Crossing its 20-DMA, coupled with the rebounding daily 14-period RSI from its nine-period average, supports a bullish bias. Additionally, the daily MACD trending upwards while sustaining above its nine-period average further validates this positive sentiment

Established in 1983 under the leadership of technocrat Dr. Pramod Chaudhuri, Praj Industries Ltd has evolved into a globally renowned biotechnology and engineering firm. Specializing in sustainable solutions for bioenergy, high-purity water, critical process equipment, breweries, and industrial wastewater treatment, the company boasts 1000+ customer references across 100+ countries on 5 continents. Praj's technological prowess is evidenced by its 90+ technologists, 400+ patent filings, and numerous patents granted both domestically and internationally. Renowned for its TEMPO (Technology, Engineering, Manufacturing, Project management, and Operations & Maintenance) capabilities, Praj operates four state-of-the-art manufacturing facilities in Maharashtra and Gujarat, strategically located near ports and bolstered by a diverse engineering team.

What adds to Praj's allure is the consistent net buying trend by mutual funds, with January witnessing the addition of 20,42,816 shares for the sixth consecutive month. With an order backlog amounting to Rs 3950 crore and the company's confidence in meeting the 3X revenue growth target set for FY30, coupled with the budget's emphasis on leveraging captive resources for Energy Independence by 2047, Praj Industries is poised for promising prospects. Margin improvements anticipated in the future, despite intermittent fluctuations, serve as key catalysts for the stock in the medium to long term.

Therefore, both swing traders and investors are advised to keep a close watch on Praj Industries Ltd.

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