Midcap: A ‘BIG’ Rounding Bottom Painting a Bullish Picture!

  • Stock Market Analysis

The mid-cap and small-cap spaces are outperforming in today’s session, with the Nifty Midcap 100 index surging 0.72% to 32,710, by 11:14 AM IST. As there has been great momentum in this pocket, traders are finding ample opportunities on the long side, among which, Delhivery (NS: DELH ) shares are one.

It is a tech-enabled logistics and supply chain company, having a market capitalization of INR 25,922 crores. It is currently a loss-making entity, having reported a net loss of INR 1,010.99 crores in FY22 but the business is rapidly growing. By Q3 FY23, the company has served in over 220 countries and expanded its reach to 18,510 pin codes in India, from 13,485 in FY19. The number of active customers has increased over a whopping 450% in less than 4 years, from 4,867 in FY19 to 26,845, by Q3 FY23.

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

Image Source: Investing.com

Coming to the main attraction, the stock is forming a crystal-clear rounding bottom pattern on the daily chart. I analyzed this counter last month as well, around INR 335 (link at the bottom) for the target of INR 370 which was a strong resistance. The reason for my bullishness was a small rounding bottom base. Today, the stock jumped 2.19% to INR 380 and is on the verge of completing a bigger rounding bottom pattern which is projecting a much higher upside and a more prominent reversal.

The next hurdle to which Delhivery shares could rally is around INR 410. This might not seem like a very lucrative move, however, a break above this level would actually complete the reversal after which the stock would prepare to head to the north. The downside potential would then be minimized to a large extent. The next level which could be eyed is around INR 450 - INR 460, which is around the lows of June 2022.

Very short-term traders can place a stop loss below the previous swing low of INR 350. However, a more ideal place for exit in case the stock takes a U-turn is INR 315.

Read More: Technical View: Stock Forms Base, Getting Ready for a ‘Reversal’!

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  • Manoj kumar @Manoj kumar
    Based on your last article on this script, I am holding it from 339.
    Like 1
    any views about sumh
    Like 0

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