Vijay Kedia's small-cap multibagger stock witnessed a flat base pattern; the ace investor holds 18,00,000 shares – watch out!

The stock has delivered impressive multibagger returns, soaring by nearly 160.59 per cent in the last year.

Following a positive start on Monday, the Indian benchmark indices faced selling pressure, causing Nifty to dip by approximately half a per cent, hovering around the 21,600 mark. Notably, sectoral performance saw a majority trading in red, particularly Nifty FMCG and PSU Bank, both experiencing declines exceeding 1.5 per cent. However, amidst this, Nifty Realty emerged as a top gainer, registering a 0.65 per cent increase. Broader market indices, represented by Nifty Mid-Cap and Small-Cap, underperformed the frontline gauge, down by 0.78 and 0.53 per cent, respectively.

Despite the broader market indices' underperformance, Elecon Engineering Ltd., a small-cap stock, exhibited remarkable strength, surging nearly 9 per cent on Monday and reaching a fresh 52-week high. This impressive move marked the breakout of a flat base pattern. In technical analysis, a flat base pattern typically follows a successful breakout from an earlier pattern, characterized by a prior uptrend of 30 per cent or more and a consolidation period where the stock moves sideways within a narrow trading range of around 15 per cent.

The breakout from the flat base pattern signaled a resumption of the upward trend, presenting a fresh entry opportunity for traders. The strength of this breakout was emphasized by robust volume, exceeding four times the 30-day average volume of 4.51 lakhs shares per day, indicating substantial participation in the direction of the trend.

Technical indicators further supported the positive outlook for Elecon Engineering Ltd. The daily MACD (Moving Average Convergence Divergence) pointed upward while staying above its nine-period average, confirming a positive bias. Additionally, the daily 14-period RSI (Relative Strength Index) generated a buy signal by moving above its nine-period average, further validating the positive sentiment.

Of notable interest is the substantial investment by renowned investor Vijay Kedia, who holds a significant 1.60 per cent stake in the company, equivalent to 18,00,000 shares. The stock has delivered impressive multibagger returns, soaring by nearly 160.59 per cent in the last year.

Given these compelling technical and fundamental factors, traders are advised to keep a close eye on this small-cap multibagger stock as it has exhibited a breakout from a flat base pattern, signaling potential trading opportunities.

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