Stock ‘Confirms Bottom’ with Bullish Div.; Rallies 6%!

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As the broader markets are holding their gains, some stocks are clearly outperforming their respective benchmarks. One such counter is Bharat Rasayan Limited, a manufacturer of Technical Grade Pesticides and Intermediates, with a market capitalization of INR 3,777 crores.

While the Nifty Smallcap 100 index is up 0.57% to 9,117, by 2:32 PM IST, the share price of Bharat Rasayan is going bonkers with its 5.71% rally to INR 9,609. However, the day's high is significantly higher than the CMP, at INR 9,985 as investors have triggered a bidding war to lap up the company’s shares.

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

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The stock had been in a long downtrend, especially from September 2022 as it didn’t give a single meaningful bounce for investors to exit. On 16 March 2023, the stock fell to a multi-year low of INR 8,280 from where it witnessed some buying interest. On the same day, it ended the session in the green zone, gaining 2.08% which was a good sign of a fading downtrend.

After that, that stock didn’t turn back and has continuously been rallying. Today is the 5th consecutive session of gains which also led it to surpass the previous swing high of INR 9,190, marked on 23 February 2023. This strong buying was also propelled by the formation of a bullish divergence at the very low.

Also, the volume action is pretty interesting in today’s session. The stock has registered a total volume figure of 12.9K shares so far which might seem less until you compare it with the 10-day average figure of 1.14K shares. This is a 1,030% rise from the average.

Now, as the stock is trading at relatively higher levels than a few sessions back, therefore waiting for some profit booking before attempting to go long might be a better idea. Traders can wait for a retracement till the immediate support level of INR 9,190 (earlier resistance). Today’s rally has confirmed the bottom for now, but waiting for the right level is also important.

After the retracement, traders can look for INR 10,000 as an immediate target on the upside. Exit in case of a loss can be made if the stock breaks its 52-week low.

Read More: F&O Stock Delivers ‘Range Breakout’; Futures Traders Ready to Buy!

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  • Danish Sulaiman @Danish Sulaiman
    Great Analysis Sir.
    Like 1
    • Aayush Khanna/ @Aayush Khanna/
      Thanks, Danish.
      Like 0
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    Like 1
  • Bharat Trivedi @Bharat Trivedi
    nice sir
    Like 1

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