Stock below Rs 50: Small-cap single digit PE stock registers a solid breakout; RSI enters bullish territory after three years!
The breakout was no mirage; the volumes were robust, validating the Dow Theory principle of strength in numbers, with a larger participation in the direction of the trend.
Step into the world of Indian markets, where the excitement and thrill of trading never cease. As the week drew to a close, the scene was set for a riveting finale. The Nifty and Sensex, those formidable indicators of market sentiment, seemed to be engaged in a dance, dipping ever so slightly, with Nifty down by a mere 0.07 per cent and Sensex trailing behind at 0.16 per cent down.
Yet, amidst this seemingly mild setback, there emerged a remarkable story of resilience and outperformance - the broader market indices stepped up to the challenge, outshining their frontline counterparts. The Nifty Midcap and Small-Cap indices held their ground with gains of 0.55 and 0.19 per cent, a testament to the hidden potential within the market.
While many stocks basked in the glory of this triumph, one company stood tall among them all - Den Networks Ltd. A powerhouse in the Cable TV Distribution domain, Den Networks boasts an impressive array of services. And if the financial figures from Q1FY24 were anything to go by, they were undoubtedly making strides with a 2 per cent sequential growth in subscription revenue, totaling Rs 146 crore in revenue, and an impressive Rs 273 crore in total revenue. The financials may not be the talk of the town when viewed on a YoY basis, but as we delve into the technical aspects, brace yourself for the excitement that lies ahead!
The stock had experienced its share of rough waters, succumbing to a downtrend after reaching its peak at Rs 115.05. Lower highs and lower lows loomed ominously over the weekly time frame. But in a twist of fate, the stock decided to flip the script and break free from the chains of its downtrend. Like a phoenix rising from the ashes, it shattered the barriers of a 31-weeks long base pattern, propelling itself forward with a stunning 16 per cent surge in a single week! The breakout was no mirage; the volumes were robust, validating the Dow Theory principle of strength in numbers, with a larger participation in the direction of the trend.
The technical indicators echoed the euphoria surrounding this remarkable turnaround. The 14-period RSI, for the first time in nearly three years, flashed a bullish sign as it ventured into the bullish territory, ascending on a trajectory of hope. The MACD, a reliable indicator of momentum, displayed an unwavering bullish signal.
And if you're still not convinced of Den Networks' potential, let the RS rating speak volumes with a resounding 75 and an upward trajectory, paving the way for brighter days ahead. The trend strength index ADX stood at an impressive 23.93, revealing a reasonable strength in the trend. But wait, there's more - the +DI soared above both the ADX and -DI, a clear sign of robust bullish strength that simply couldn't be ignored.
So, there you have it - a stock that defied the odds, a company with a renewed sense of purpose, and technical indicators that painted a picture of promise. For all the astute market participants out there, Den Networks Ltd. is a name that should undoubtedly find a place on your radar. The stock has a book value of Rs 67.2 and it currently trades at 0.63 price to book value. The stock P/E stands at 7.59.
It is crucial to remember that the views and opinions expressed in this article are solely for informational purposes and do not constitute financial, investment, or any other form of advice. Investors are advised to conduct thorough research and seek guidance from professional financial advisors before making any investment decisions.