Small Cap Stock: Chart Check: This small cap stock is up 100% from the June lows; should you buy or book profits?

which is part of the S&P BSE Smallcap Index, has doubled investors’ wealth from its 52-week low recorded in June 2022, but technical indicators suggest the momentum is still intact and could take the stock towards the level of Rs 300, experts suggest.

Traders who missed the rally seen over the past three months can consider buying the stock now or down for a possible target towards Rs 225-375 over the next 6 months, experts suggest.

It also gave a breakout from a symmetrical triangle formation on the monthly charts, which is a bullish sign.

The symmetric triangle is generally considered a continuation pattern, but there are instances where it acts as a reversal pattern. A break down after an uptrend should be considered a reversal pattern. Read also

The stock has seen a vertical rise after hitting a 52-week low at Rs 95.80 on June 20, 2022. The stock closed and hit a 52-week high at Rs 195.45 on June 19, which translates into an increase of more than 103%.

Jai Corp has traditionally been in manufacturing businesses such as steel, plastic processing and spinning. It now focuses and invests in emerging opportunities such as SEZ development, infrastructure, venture capital and real estate, the company’s website said.

The stock has been on buyers’ radar so far in 2022. It’s up more than 21% in a week and more than 45% in a month.

However, it is trading near overbought levels; a decline cannot therefore be ruled out. Short to medium term investors may look to buy the stock down towards Rs 165-120, experts suggest.

Agencies

The relative strength index (RSI) is placed at 72.6. An RSI above 70 is considered overbought. This implies that the stock may show a pullback, according to data from Trendlyne. MACD is above its center and the signal line, it is a bullish indicator.

“Jai Corp stock price began its rise from 1.45 (April 2003) to 1450 (January 2008), creating a series of higher highs and lows, supported by volume. During the move, the stock continuously traded above averages,” Bharat Gala, President – ​​Technical Research,

Titles, said.

“There was continued profit booking, the stock traded below averages and bottomed out at Rs 35.5 in Aug 2013. In between the stock recovered a bit but was unable to break through the Rs 300-350 price zone,” he said.

“Recently, the stock has been giving symmetrical triangle breakouts in the monthly charts. The monthly price bar is formed above the line connecting January 2008 and August 2022. above the previous high of 173 rupees,” Gala added.

The William %R, CCI and ADX indicators indicate the buying strength of the stock. The behavior of the price suggests a possible further rise.

“Possible targets are Rs 225-375 -575. If the stock price corrects lower, the buy levels are Rs 165-152-141-130-124. A stop loss to observe in the trade is Rs 114,” Gala recommends.

(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Karen J. Nelson