The broader markets do not seem to be having a good time in 2022 compared to what we have seen in the last two years since the Covid-19 pandemic hit the shores The number of stocks making a new 52-week high has narrowed down considerably in the last few months, depicting that the sudden surge of inflows seems to be abating now.
While both the Nifty 50 and Sensex are trading flat at 15,799 and 52,081, respectively, one stock that is grabbing all the eyeballs is Orient Bell Ltd (NS: ORBL ), backed by ace investor Porinju Veliyath. The share price of Orient Bell has been in momentum since 24 June 2022. However, today, Orient Bell shares jumped 7.5% to INR 711, by 11:03 AM IST, on top of a 13.9% rally in the previous session, totalling over a 23% gain by now. Today, the stock also marked a new 52-week high of INR 726.7.
The company is engaged in the manufacturing, marketing and selling of building products such as tiles, ceramic walls etc. with a market capitalization of INR 952 crores. Some of the direct competitors of Orient Bell are Kajaria Ceramics (NS: KAJR ), Somany Ceramics Ltd (NS: SOCE ), Cera Sanitaryware Ltd (NS: CERA ) etc.
In FY22, the company reported a record consolidated net income of INR 151.1 crores which is almost 50% higher than last year’s figure of INR 100.78 crores. Although it is a consistently dividend-paying company but the yields are not lucrative enough at the current price, which is around 0.84%, however, it's still above the sector’s average of 0.68%.
Image Description: Daily chart of Orient Bell showing a bullish flag pattern breakout
Image Source: Investing.com
Coming to the technical structure the stock seems to be on fire since yesterday. The rally towards the all-time high is already impressive considering the volatile environment, however, the volume spikes in these two days have been even more impressive. Yesterday, Orient Bell shares clocked a volume of 474.35K shares which was the highest for the month but also 2,220% higher than the 10-day average of 21.36K shares. Even today, in the first two hours alone, the volume is recorded at 469.3K shares which is almost yesterday’s entire volume.
As I have mentioned many times earlier, it’s a bit tricky to determine how far an all-time high stock can rally as there is no overhead supply left and no resistance levels to figure out some potential hurdles. However, just before the ongoing rally, the stock staged a successful breakout from a bullish Flag pattern which projects a theoretical target of INR 910 - INR 920. How did I calculate the max potential of the rally? Well, in a bullish flag pattern the length of the pole (approx. INR 297) is added to the breakout level (INR 620) to estimate the potential target
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