An ‘ATH Breakout Stock’ to Keep on the Watchlist!

  • Stock Market Analysis
  • Editors Pick

The relative strength of a stock is seen when it is outperforming the broader markets and these stocks are generally good candidates to keep on the radar. Today, while the market sentiments are broadly negative one stock that is scaling to all-time highs is Redington India Ltd (NS: REDI ).

The company is one of the leading IT technology solutions providers with a market capitalization of INR 14,074 crores and it is transforming the distribution and supply chain ecosystem. It pays a healthy dividend, and currently trading at a dividend yield of 3.66%, while its P/E ratio stands at a lucrative 11, compared to the industry's average of 27.91. Foreign Institutions hold a sizable stake of 37.93% in the company, while 11.68% is with mutual funds, which is quite good for such a small company.

Image Description: Weekly chart of Redington India with volume bars at the bottom

Image Source: Investing.com 

Coming to the weekly chart of Redington India, there have been numerous attempts in the past to break a very strong resistance of INR 180. Every time the stock tried to cross this resistance it eventually failed as the bears outnumbered the bulls on all occasions. These multiple failures to surge past this resistance increased the importance of this level. Even in the last couple of weeks, the stock surged above level but couldn’t close over INR 180 on a weekly basis.

Today, there seems to be another attempt to cross this level and scale to new highs. Although today, is Tuesday, meaning there are still 3 days to go to confirm a weekly closing but a noticeable outperformance in today’s session with respect to the broader markets has increased the reliability of the stock closing above INR 180 by Friday. Although it is not guaranteed, going purely by strength, today’s move holds high importance. 

The volume action is also interesting here. If you look at the 6-week average volume around the immediate preceding swing low (the week starting 24 October 2022), it is 7.37 million shares, which has shot up to 28.36 million shares by today 2:46 PM IST, translating into a surge of over 280%, during the entire rally. That’s an encouraging figure so far.

A weekly closing above INR 180 would mean that the bulls are finally ready to charge higher. Estimating a target at the all-time high is somewhat difficult as there are no more supply zones left to analyze. However, reaching the never-before-seen level of INR 200 would probably be not much of a difficult task for the stock. 

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  • Abhishek Singh @Abhishek Singh
    Thanks 👍
    Like 0
  • Jaydat Patel @Jaydat Patel
    Sir tomorrow nifty 50 up or down
    Like 0
  • Shruthi Shree @Shruthi Shree
    thanks man
    Like 2
    • Aayush Khanna/Investing.com @Aayush Khanna/Investing.com
      You're welcome Shruthi :)
      Like 0
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  • namami ghosh @namami ghosh
    yaaaay... in my portfolio
    Like 2
    • Aayush Khanna/Investing.com @Aayush Khanna/Investing.com
      😂
      Like 1
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