Five Chemical Stocks that may Shine this Financial Year

  • Stock Market Analysis
  • Editors Pick

In the past week, the key indexes have performed exactly as I had said in my pre-market videos. This is as on Monday I had stated that I am bullish even though most were very skeptical as they expected a downfall. However, the rise occurred as expected and those who bought calls with me made a good return. However, the only day I was bearish was Thursday, and a pullback came as I had expected. After which, in Friday’s pre-market video, I had once again stated it was time to go long. Hence, due to the positivity seen in the indexes, I decided to write an article on one sector that I believe will shine in the coming financial year. The sector I am talking about is the chemical sector.

My bullishness in the sector stems from two sources. The first source of my bullishness is the positive technicals and quants being seen in many chemical names. Whilst, the second source of bullishness stems from the Ukraine crisis. This is as pre-war the European chemical industry was already struggling with exalted energy prices. However, this issue has only been worsened by the Ukrainian war. I say this as it has not only shot up energy prices but has also created a lot of new hurdles for European manufacturers. Therefore, I believe all these issues will give Indian chemical firms a leg up in the global market. Thus, in this article, I will cover five chemical stocks that are making a bottom. Three chemical stocks have been covered via the article, whilst I have covered the fourth and fifth stock via a YouTube video attached below.

Coming to the stocks, the first one we will look at is Valiant Organics Ltd (NS: VALN ). The stock is presently at a support zone on the monthly chart and is attempting a strong comeback on the weekly chart. I say this as the stock has been under strong accumulation since late February. Moreover, the stock received further support from the volume spike that occurred on 21st March. This is as on the week beginning 14th March the stock had a volume of 293,000, whilst in the week beginning 21st March, the stock had a volume of 1.995 million. Thus, we can see the spike confirming the formation of a strong bottom. Hence, we can consider March’s low as being a base for the equity in the coming months.

Coming to the resistance levels for the coming weeks. If the stock breaks the resistance level at Rs. 1,050, then I expect it to rally until Rs. 1,240. This is the short-term hurdle for equity. Once it clears the resistance zone at Rs. 1,240, then the next targets in the medium term are at Rs. 1,530 and Rs. 1,700. Coming to the near-term support, there is support at Rs. 950 and at Rs. 840.

The second stock I am looking at is Chemcon Speciality Chemicals Ltd (NS: CHEO ). I am watching this equity closely and have created a small position in the stock, as I believe it is under accumulation. This is as so far it is following the same pattern as the one seen in Valiant Organics. I say this as the stock is presently trading within a box range whose support is at Rs. 260, whilst the resistance level is at Rs. 302. If the equity were to break the box range resistance level, then we can expect a rise in the short term until the quant resistance level at Rs. 335. However, if it breaks the support at Rs. 260, then we can expect a fall until Rs. 237.

Coming to the medium term. If Chemcon were to break the short-term resistance level at Rs. 335, then we can expect a rise until Rs. 365. If that were to break, then the next target will be the resistance zone between Rs. 440 and Rs. 465.

The third stock am looking at is S H Kelkar And Company Ltd (NS: SHKE ). The stock is at an interesting place on the weekly and monthly charts. I say this as on the weekly chart, the stock has formed a bullish formation on the 200-day moving average. Moreover, on the monthly chart, the stock in March formed a bullish pattern at the bottom of the box range it has been trading in since May 2021. Plus, the 20-day moving average is providing excellent support to the equity for the last two months. Thus, in the short term, if the stock were to have an up move, then the resistance zones are at Rs. 155 and Rs. 170. Whilst, the short-term support zone is between Rs. 130 and Rs. 135.

Coming to the medium term. If the equity were to break the short-term resistance zones, then we can expect an initial up move until the resistance at Rs. 183. A break of that will let us get a target of Rs. 224 in the longer term.

The last two equities I am looking at are IOL Chemicals and Pharmaceuticals Ltd (NS: IOLC ) and Clean Science and Technology Ltd (NS: CLEA ). However, I have not covered them via this write-up as I analyzed both equities via a YouTube video attached below. I have covered the two equities in this manner owing to their chart patterns in the longer timeframes. Thus, the analysis of them will be understood better via a video. 

Overall, in the medium and long term, I am bullish on the Indian chemical sector. This is as the current energy and military crisis affects Europe disproportionately, which helps Indian companies. This, in turn, will let Indian and Asian chemical firms capture global markets at an accelerated pace, as Europe is at a competitive disadvantage. 

Good luck trading.

Disclaimer: The investments discussed by Sandeep Singh Ahluwalia may not be suitable for all investors. Thus, you must trust your analysis and judgment before making investment decisions. The report provided is for informational purposes only and should not be interpreted as a proposition to buy or sell any securities.

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  • Chandrasekhar Krishnamoorthy @Chandrasekhar Krishnamoorthy
    neogen chemicals also to be monitored.
    Like 2
  • vishnu kant upadhyay @vishnu kant upadhyay
    We cant ignore aarti industries if chemical sector comes in conversation…
    Like 0
  • Abinaya Karthikeyan @Abinaya Karthikeyan
    All these are newly listed companies so high risk is there beware
    Like 2
    • manish kumar @manish kumar
      only beware with thouse company who have virtual business .. like paytm and zomato...if companies have real hardcore business then they have good future...
      Like 0
    • Ashik Muhammad @Ashik Muhammad
      @manish kumar hope yesbank wasnt virtual lol
      Like 0
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