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Stock Breaks Out of Inverse H&S Pattern, Rallies 7%

Published 20-06-2024, 10:31 am
HEUB
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While the mood of the broader market is not good enough, stock-specific buying is still there. The Nifty Small cap 100 index is up 0.44% to 18,236, by 10:16 AM IST and one counter from this space that is gaining quite good traction is Heubach Colorants India Limited, formerly Clariant Chemicals (India) Limited (NS:HEUB).

This is an India-based company, which is principally engaged in the business of manufacturing and selling specialty chemicals and has a market capitalization of INR 903 crore. The company’s segments include Plastics and Coating and Specialty Chemicals.

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The stock had taken a decent hit since the beginning of the year, falling from a January 2024 high of INR 654.9 to the recent low of INR 354, losing a whopping 45% value in less than 6 months.

Image Source: Investing.com

From the last few sessions, the stock had been consolidating in a range and the price action formed an Inverse Head & Shoulders chart pattern on the daily time frame. This is a bullish reversal pattern and is known to reverse the prior downtrend into an uptrend.

Today, the share price of Heubach Colorants India completed this pattern and jumped the neckline at INR 405, delivering a successful breakout. The volume for the day so far has been recorded at over 205K shares, which is 367% higher than the 10-day average of 46K shares, and its only been an hour into today’s session.

The breakout supported by volume expansion is now painting a rosy picture for the counter and bulls have already started to charge from hereon. Looking at the dimensions of the pattern, the stock seems geared up to travel to INR 455, depicting an 8% upside potential, from the CMP of INR 421.

On the other hand, if the stock takes a U-turn, then a stop loss below INR 387 would be sufficient to cut the losses.

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X (formerly, Twitter) - Aayush Khanna

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