Sectorally, buying was seen in metals, consumer durables, oil & gas, and capital goods while selling was seen in realty and banks.
Stocks that were in focus include names like NLC India which rose more than 6%, Ircon International gained nearly 7% and Dr Reddy’s Laboratories closed with gains of over 3% to hit a fresh 52-week high on Wednesday.
We have collated a list of three stocks that either hit a fresh 52-week high or saw a volume or a price breakout.
We spoke to a trader on how one should look at these stocks the next trading day entirely from an educational point of view:
Analyst: Kumar Saurabh, Director at Technofunda Ventures Private Limited
Dr. Reddy’s Laboratories:
Dr. Reddy’s is one of the leading pharma companies which has grown its revenue and PAT at a CAGR of 12% and 31% in the last three years.
Also, pharma as a sector has gained momentum in the last few weeks after two years since it last peaked in July 2021. The stock formed a strong base around Rs 4,000-4,800 before making an upward move.
On a relative strength basis, the company has started outperforming the Nifty50 after more than two years. Though the company looks stretched on daily charts, on weekly charts, the stock has given a breakout from its previous highs of 2021 when the pharma index topped out.
As the prices look stretched on the daily charts given both sector and stock has come in strength after a long time with good performance and reasonable valuation, one may look to partially accumulate on falls with Rs 5400 as a stop loss.
One can play on the weekly charts keeping an eye on the pharma sector’s strength and future quarter results.
ETMarkets.comNLC India
NLC India is in the business of mining lignite and power-using lignite. Though the company has given a breakout crossing 6-year-old resistance on the weekly charts.
Whenever a stock’s relative strength to the Nifty50 has gone in a zone above 0.4 (Juen 2014, March 2017, June 2022), the stock has faced good correction.
Also, fundamentally, in the last six years during these times, the price-to-sales ratio of the company peaked each time around 1.1.
Currently, again, the relative strength is in a high band zone above 0.4, and the price to sales is around 1.1. So, one should have a cautious view of trade.
However, Rs 121 has been multi-year resistance and currently, the stock is at Rs 132. In case, the stock comes near the 121 band, one may look for a trade with Rs 120 as a stop loss to avoid any major losses.
ETMarkets.comETMarkets.comIrcon International
Ircon International recently broke the previous resistance of Rs 88-89 and since then has been in a strong up move with its current price at Rs 106.
As the nearest risk-to-reward point of previous support is more than 15% below, it is not favourable for a profitable trade.
The company is in the railway infrastructure space and currently, both railways and the infrastructure sector have good business tailwinds and price momentum hence, one should keep on the radar for a better risk-reward scenario.
ETMarkets.comAnalyst Disclaimer
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(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. These do not represent the views of Economic Times)