A 16% Rally On 850% Volume Spike! This Stock is Catching Attention

  • Stock Market Analysis
  • Editors Pick

The broader markets have ended the session on a positive note, delivering a much-needed follow-up rally after yesterday’s session. The benchmark index Nifty 50 closed 0.92% up at 15,699.25 and the Sensex was up 0.88% to 52,727.98 by the closing. 

Although most of the stocks closed with an uptick owing to positive sentiments, some stocks have really caught investors’ attention and one of the names includes MMTC Limited (NS: MMTC ). The share price of MMTC delivered a massive intraday gain of 16.69% to the last closing price of INR 39.85 on 24 June 2022, surging to the highest level since 8 June 2022. MMTC shares have also become the top gainer from the Nifty 500 list and account for a minor weightage of 0.01% in the index.   

MMTC is a small-cap company that is focused on the trading of metals, agro products, Minerals, Coal etc. and has a market capitalization of INR 5,122 crores. The company has been reeling under losses for the last two years, reporting a consolidated loss of INR 291.75 crores in FY20 and INR 789.28 crores in FY21. It has already delayed disclosing its FY22 earnings report, however, a board meeting on 30 June 2022 has been called to consider and approve FY22 results.

Image Description: Comparative chart analysis of MMTC (Blue) and Nifty 500 (Red)

Image Source: Investing.com

Coming back to today’s price action, MMTC shares have been in a consistent downtrend after they made a 52-week high of INR 64.7 on 31 January this year. Although much of the credit could also be given to the weakening of the broader market sentiments on account of the Russia-Ukraine war, inflation and now a global recession. Despite a jump of over 16% today, the stock has outperformed the Nifty 500 index by just over a per cent this year. The Nifty 500 is down 12.38%, while the share price of MMTC plunged 11.64% in CY22 so far. 

Daily line chart of MMTC

Image Description: Daily line chart of MMTC with volume bars at the bottom 

Image Source: Investing.com

Today’s rise has been witnessed on account of a high volume figure. As per the exchange data, the stock clocked a volume of over 9.63 million shares, which is the highest one-day volume in over 2 months. Also, today’s volume was over 850% higher than the 10-day average of 1.01 million (as of yesterday). Surely, volume support with the price rise has further increased the reliability of the ongoing rally in the stock.

Today’s rally has not changed the current medium-term trend which is still negative. A break above the falling trendline resistance on the chart would probably lead to a trend reversal and a further acceleration of the up trend. As far as the current up move is concerned, a continuation of the bounce till the trendline resistance could be possible.

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