Traders having a high-risk appetite and good experience with dabbling in the small-cap space might want to have a look at the share price of Rajshree Polypack Ltd (NS:RAJH). It is a lesser-known manufacturer of plastic packaging products, having a market capitalization of only INR 182 crore.
The analysis is solely based on the price and volume action that has been witnessed in the past two sessions and no fundamentals are taken into consideration here.
Image Description: Daily chart of Rajshree Polypack with volume bars at the bottom
Image Source: Investing.com
Since February 2023, the stock had been facing stiff resistance around INR 170 odd levels. There have been multiple instances when the stock tried to breach this level from below but due to high selling pressure, it eventually turned its direction every time.
Yesterday, it rallied 5.78% on the back of a volume of 98K shares, which is a high figure for this counter. In fact, this was the highest one-day volume in over 6 months. This was followed by an even higher volume spike of 131.7K shares on Wednesday, as the stock jumped by another 6.7%. This volume action is probably a hint that something is going on with this counter as investors are suddenly getting interested.
On top of that, today’s 6.7% rally to INR 169.95 helped the stock to close exactly at the resistance level and this is the highest closing since early February 2023. Combining both the price and volume action, the stock seems to be gearing up to deliver a very sharp rally above INR 170, at least till INR 190 - INR 195. Traders can put this counter on the watchlist to hunt for long opportunities above this hurdle.
As it is a very low-volume counter, the rally can be explosive and that is also the reason why a very heavy position should not be made to avoid high impact cost. Impact cost is the difference between the bid and ask price. Also, to manage the risk on long positions, a stop loss below INR 150, preferably on a closing basis can be placed.
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