Don’t miss the action: Keep this specialty chemical stock on your watchlist; swing trading signals turn green!

We expect the recovery in prices and margins to be gradual over the next 2-3 quarters.

Indian markets have demonstrated a smart recovery from the opening jolt, with Nifty trading higher by 0.16 per cent. The majority of the sectors were observed trading in the green, led by Nifty Media, which was up by over 2 per cent, followed by Nifty Energy, up by 1.04 per cent.

The broader market indices were buzzing, with Nifty Mid-Cap and Small-Cap trading higher by 0.93 per cent and 1.19 per cent, respectively. Considering the outperformance by the broader market indices, the advance-decline ratio strongly favored advances, with 1541 stocks trading in the green.

Amidst this recovery, one stock has captured the limelight in the specialty chemicals sector – Chemplast Sanmar Ltd. It is one of the leading players in custom-manufactured chemicals and one of the oldest manufacturers of Chloromethanes in India. The stock is trading higher by nearly 6 per cent, and as we approach mid-way through the trading session, the stock has recorded its highest single-day volume since November 20, 2023.

Technically, on the daily chart, the stock found support around the rising trendline formed by connecting the lows of November and December 14, 2023. Interestingly, there was a confluence of support as the 20-DMA and rising trendline were in sync and almost at the same level. With Thursday’s strong move, the stock has surpassed its prior swing high observed in early December 2023.

The daily MACD is in an uptrend and is seen rebounding, taking support at its nine-period average, validating a positive bias in the stock. The daily 14-period RSI is also rebounding after forming a base at the nine-period average, supporting the positive bias. The stock has the potential to test the level of Rs 540 in the short term, where it may encounter resistance.

The Managing Director has commented, “The demand outlook for our PVC products, however, remains strong with a boom in the infrastructure and real estate sectors. We expect the recovery in prices and margins to be gradual over the next 2-3 quarters.”

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