Hedge against heat: Keep an eye on this FMEG stock as temperatures begin to soar!

March begins on a good note in the stock market.

In February, the country recorded its highest ever maximum temperature with an average of close to 30 degrees Celsius, the highest since 1901 when weather records began.     

With soaring temperature in February, foreign institutional investors (FIIs) sold off their stocks in market, resulting a drop of almost 2 per cent in the NSE benchmark Nifty50 index. FIIs sold almost Rs 10,000 crore in the last five trading sessions.   

As March begins on a good note in the stock market, investors should focus on stocks that provide a hedge against heat as temperatures in the country are expected to rise. One such stock to look out for is Havells India Ltd.    

Havells India ltd, a leading Fast Moving Electrical Goods (FMEG) Company, owns and operates 5 brands i.e. Havells, Crabtree, Lloyd, Standard and REO functioning in different product segment with an average market share in the range of 15 to 20 per cent in the domestic market.     

After rallying from lower levels of June 2020 it made an all-time high of Rs 1494, however, after seeing a momentum of nearly 238 per cent from lows of May 2020, the stock lost its momentum.     

From last few weeks, the stock is showing strength with good volumes with move of 21 per cent despite the weakness of market and consumption sector as well. On Tuesday, the stock has advanced around 3 per cent with highest volumes in the last 10 trading session volumes. Interestingly, the stock has seen a follow-through move on Wednesday, as well as it is up by 1.5 per cent. 

From a technical standpoint of view, the Exponential moving averages of period 5-13-26 are about to give a crossover breakout, which indicates a strong momentum for the near term.   

Contrarian Investors and swing traders can add this stock to their watchlist as this stock can act as a hedge against heat.