Big Breakout: Sugar stock below Rs 35 nearing a 9-year-long breakout; Is this underdog the next big multibagger to watch out for?
Back in 2014, the stock reached a high of Rs 32.60, and since then, it has meandered through a roller coaster ride. However, on the weekly chart, the stock recently notched a resolute breakout of a seven-week long double bottom pattern at Rs 28.15. Technically, it now flirts with a nine-year long rounding bottom like pattern
The jubilant spirit is in the air! The India men's cricket team has conquered the formidable South African men's team at the iconic Eden Gardens. Simultaneously, the NSE benchmark Nifty 50 seems to be in celebration mode, with a buoyant start to the week, trading up by over half a per cent. As if in harmony with the cricketing triumph, the broader market indices are dancing to the same tune, with Nifty Mid-Cap and Small-Cap surging 0.62 and a remarkable 1 per cent, respectively. Amidst this cheerful symphony, the advance-decline ratio firmly favors the bulls.
But wait, what's a celebration without sugar? The sweetness of the occasion led us to a fascinating name in the sugar sector—a small-cap stock with a market cap exceeding 4000 crore—Bajaj Hindusthan Sugar Ltd.
A Sugar High: Bajaj Hindusthan Sugar's Rally
On this vibrant Monday, Bajaj Hindusthan Sugar Ltd has taken center stage, surging nearly 12 per cent. A staggering six crore shares have already changed hands on the NSE, and the day is only half over. This robust performance places the stock on the cusp of a significant nine-year long breakout.
Back in 2014, the stock reached a high of Rs 32.60, and since then, it has meandered through a roller coaster ride. However, on the weekly chart, the stock recently notched a resolute breakout of a seven-week long double bottom pattern at Rs 28.15. Technically, it now flirts with a nine-year long rounding bottom pattern.
Technical Triumph: The Path to Breakout
The stock, seen through a technical lens, paints a picture of strength and potential. On the daily chart, it confidently trades above its crucial moving averages, including the 20, 50, and 200 DMA, with all aligning in the desired sequence and trending upward. The daily RSI follows an ascending trajectory, underlining the positive bias.
On the weekly timeframe, the RSI confidently resides in super bullish territory. Among the oscillators, both the daily and weekly MACD indicators maintain a strong upward trajectory and diverge from their nine-period averages, further validating the positive bias.
The Average Directional Index (ADX), the trend strength indicator, stands at 41.58, indicating remarkable trend strength, and it's on an upward path. The +DI consistently surpasses the -DI, affirming the stock's bullish strength.
Conclusion: A Stock to Watch
In conclusion, Bajaj Hindusthan Sugar Ltd stands tall with its robust technical structure, impressive price strength, and robust buyer demand. This stock should be on the radar of investors and traders alike, especially those with an appetite for potential breakouts.
In a recent development, the company has received a substantial sum of Rs. 1361 crore in an escrow account designated exclusively for cane price payments for each of its 14 sugar units from Uttar Pradesh Power Corporation Limited. This payment clears the cane payment arrears for the sugar season 2022-23.
As icing on the cake, the stock has delivered multibagger returns of 177 per cent in the last year. We invite you to share your buying price of Bajaj Hindusthan Sugars Ltd in the comments section, along with your views on this sweet success story. It seems the celebrations are far from over.
Disclaimer: The article is for informational purposes only and not investment advice.
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