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Breakout: 2 Small Caps that Went Crazy on Wednesday!

Published 24-05-2023, 07:27 pm

Despite a gap-down opening in the Indian markets, many stocks were able to attract investors’ interest, which led to their green closing. These times are good to filter stocks with high relative strength and if you are looking for such counters, here’s a list of 2.

UMA Exports Limited

UMA Exports Ltd (NS:UMAE) is a lesser-known name among traders. It is engaged in the trading and marketing of agricultural produce and commodities, having a market capitalization of INR 2,003 crores. Investors flocked toward the company’s shares in today’s session, leading to a price gain of 11.6% to INR 48.3. The stock gapped up to deliver a breakout above the resistance of INR 44 - INR 44.5 and comfortably closed above it.

Daily chart of UMA Exports with volume bars at the bottom

Image Description: Daily chart of UMA Exports with volume bars at the bottom

Image Source: Investing.com

On the volume front, the NSE recorded a total volume of 511K shares, which is the second-highest one-day volume this year and 1,370% higher than the 10-day average volume of 34.7K shares. The liquidity in this counter is less, which could help it to deliver a sharp rally to INR 55 in the immediate future. It is also significantly down from its listing, which makes it a good candidate for mean reversion.

Cambridge Technology Enterprises Limited

Cambridge Technology Enterprises Ltd (NS:CATE) is also an unheard name in the stock market. It is an IT company that provides programming, consultancy and related services, having a market capitalization of only INR 110 crores. The stock has been rising for the last three sessions and has gained around 17% this week so far, including today’s 10.2% rally to INR 64.05. On the daily chart, the stock is forming a rounding bottom chart pattern.

Daily chart of Cambridge Technology Enterprises with volume bars at the bottom

Image Description: Daily chart of Cambridge Technology Enterprises with volume bars at the bottom

Image Source: Investing.com

This strong momentum is expected to continue for a while till the stock hits its next hurdle of INR 68. Crossing this level would further increase the strength of the current rally. Today’s up move was also backed by a heavy volume of 257.1K shares, which is the second-highest one-day volume for this year so far. Waiting for a dip before initiating long positions might be a better idea and traders with less risk appetite should avoid this highly volatile counter.

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