Here Comes a New Star on Traders’ Horizon

About the company:

Welspun Corp (NS:WGSR) is one of the flagship companies of Welspun Group. It is a leading manufacturer of large diameter pipes globally. These pipes are used for offshore and onshore transmission of oil, gas, and water. It is among the largest welded line pipe manufacturing companies in the world. The stock is trading at a discount of 12.4% to its all-time high / 52- week high level. The 52-week high and 52-week low range is Rs 166 – Rs 99.

Technical observations:

One week time frame: (Chart 1)

On a weekly time frame, you should observe that Welspun Corp stock has traded in Upward Sloping Channel from April 2020 until July 2021. Since then, the share broke down from the channel and took support at an elementary level of Rs 109. Later it bounced back from the week starting August 23, 2021. The scrip started trading above the 50-day EMA line in the current week and is testing a critical resistance level of Rs 146. Relative Strength Index (or RSI) is above 50, and the Moving Average Convergence Divergence (or MACD) line crosses the signal line from below, which denotes positive momentum on the share. Long-term investors may enter at the current level or enter once the stock crosses and sustains above Rs 146 – Rs 155 (this range denotes the gap stock created in the week of March 9, 2021). They should maintain the stop loss at Rs 106 on a weekly closing basis.

One day time frame: (Chart 2)

On a daily time frame, you should note that Welspun Corp stock has been trading in an Upward Sloping Channel since the start of September 2021. Today, the share broke out of this channel with hefty volumes. RSI is above 70, which indicates positive momentum on the scrip. It would help if you also observed that the share had made a Rounding Bottom formation. Today’s upward movement is a breakout above the critical resistance level of Rs 137. Positional traders should enter once the stock sustains above Rs 137 in the next couple of days, and they should maintain the stop loss at Rs 121 on a daily closing basis.

Conclusion

We firmly believe that the stock maintains positive bias and marches forward in a couple of trading sessions. Short-term traders should take a position at current levels and keep a strict stop loss of Rs 132 on a daily closing basis.