This small-cap textile company soars over 6 per cent despite weak market! Is it ready for an uptrend?

With emerging positive signs, the stock can be a good trading idea for the short to medium term.

Ginni Filaments Limited is a Small-Cap textile company, which is engaged in the manufacturing of cotton yarn, non-woven fabric, garments, and other types of textile clothing. With a market capitalisation of just Rs 334 crore, the company reported increased profits in the last three years and has higher than industry revenue growth.   

After a few weeks of a continuous downtrend, the stock has witnessed some positive sentiment emerging as it jumped about 30 per cent since its prior swing low of Rs 30.55 in just seven trading sessions. On Wednesday, the stock soared over 6 per cent to close above its 20-day moving average level. Interestingly, it has recorded a stronger volume, which is found to be greater than the 10-day and 30-day average volumes. This shows increasing participation among the traders with an expectation of a positive move. On the technical chart, the stock has registered a good V-shape recovery too. The 14-period daily RSI (54.82) shows improving strength while the MACD histogram is rising steadily, indicating a good upmove. A positive point to note here is that the stock has closed above its 23.8 per cent retracement level of its prior downtrend.   

In one month, the stock has climbed 6 per cent, outperforming the broader market. With emerging positive signs, the stock can be a good trading idea for the short to medium term. A rise above Wednesday’s high of Rs 40 shall be considered positive and the stock can test the level of Rs 45, and then, Rs 48 level. However, a fall below the 20-day moving average level of Rs 36 shall be considered weak.  Keep an eye on this stock as it has the potential to provide good returns in the near term.