Even After a 300% Rally, this Stock Hit a New 52-Week High Today!

  • Stock Market Analysis

While the broader markets have been facing high volatility as investors are taking a cautious stance amid the ongoing geopolitical tensions, one stock has been consistently outperforming the benchmark indices. 

The Nifty 50 index has delivered a massive return of over 116% from the March 2020 low of 7,511 to the current value of 16,280. Although this might seem a gigantic run, especially for an index, there are many stocks that have gone 3x - 5x in the same time frame.

One such stock is Blue Dart Express (NS: BLDT ), which has not just outperformed the Nifty 50 index but also gave investors a place to hide during this high volatility period. Looking at the chart of Blue Dart shares, it does not seem less than a dream rally for investors. The stock has rallied around 310% from the March 2020 lows, as of the last traded price of INR 7,493.8, retracing a bit from today’s 52-week high of INR 7,500, by 1:00 PM IST.

However, what’s more interesting is, that it is the only stock in the Nifty 500 index that has scaled to a new 52-week high today. With the current level at 16,280, the Nifty index is down around 12.5% from the 52-week high of 18,604.45, showing a clear-cut underperformance with respect to Blue Dart shares.

Blue Dart and Nifty

Image Description: Comparative analysis of Blue Dart (Blue) and Nifty 50 (Purple) this year

Image Source: Investing.com

Blue Dart shares are in a strong bull run. To quantify this opinion we placed a 200-day Simple Moving Average (SMA) on the same chart. For the long-term analysis, a 200-day SMA is most popularly used to define the broader trend of the underlying security, and is often called the “line of control”. A stock trading above this average is considered to be in a strong bull run and below this average, the stock is deemed to be in a strong bear run. 

Blue Dart shares

Image Description: Daily chart of Blue Dart shares with 200-day SMA

Image Source: Investing.com

The stock is comfortably trading above its 200-day SMA which is currently trading at INR 6,485. This means a fall of around 14% is required from the current levels to quantitatively negate the strong bull run (as per the moving average). In technical parlance, a fall of over 20% from the 52-week high generally notifies the start of a bear run.

The ongoing rally has also been attracting an increasing number of investors, which is generally a healthy sign of a trend. Looking at the volume for the day so far, more than 36.5k shares have been exchanged, which is higher than the 20-day average of 23.6k shares. Also, the 20-day average of the daily volume itself has notched up almost 300% since the beginning of the month, which was around 7.8k shares on 29 April 2022.

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