Stock Under Rs 10 hits 20% Upper Circuit; A Start of Multibagger Rally?

  • Stock Market Analysis

Today’s market rally has not just increased the confidence of investors but also bumped up their risk appetite to place some high-risk bets on microcaps. One lesser-known stock that has come on my radar is Gayatri Projects Limited. It is an infrastructure company that executes civil works across roads, Industrial and power projects and has a market capitalization of less than INR 200 crores.

The stock had been plunging from higher levels for a long while now. The stock marked a 52-week high of INR 52.95 in October last year and since then has only been seeing a downward momentum. The selling spree going on in this counter had been so strong that no level since then seemed to cap the plunge and every counter rally on the way down had been sold off. Investors only kept on exiting the stock at every possible level and hence the stock tanked to a 52-week low of INR 8.15 yesterday. This depicts a massive capital erosion of around 85% from the 52-week high.

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

Image Source: Investing.com

Without a doubt, the fall also made the stock highly oversold as what was depicted by the RSI (14, daily). The RSI plunged to a level of 25.21 on Monday which clearly fulfills the criterion of a lower reading than 30 for the oversold condition. 

However, today, the stock bolstered to the highest level in the last 4 sessions, on a single day, as it rallied 20% to hit the circuit limit of INR 9.8. The massive surge in the price was also backed by a volume of 12.55 million shares which is over 70% higher than the 10-day average volume of 7.23 million shares. The volume action behind the price rally, strong enough to hit a 20% upper circuit limit are indicating a probable trend reversal from here. Today's rally has also been accounted for by the RSI which has generated a reading of over 40.63, indicating a classic buy signal by the indicator.

Today’s price action looks like there was a climax that happened in the last trading session which was probably the last phase of the fall. Now as the stock has started to move on the upside, the nearest level to which it can rally in a jiffy is around INR 14, which depicts a 30% move from the CMP. However, if the current rally actually proves to be a lasting trend reversal, then it won’t be surprising if the stock doubles from here (at least) in the foreseeable future. It is a penny stock therefore it is probably not suitable for every type of trader as they are the epitome of volatility.

 

Disclaimer - Any security mentioned above shall not be deemed as a recommendation to buy/sell/hold the same. 

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  • HARESH THAKKAR @HARESH THAKKAR
    Hello sir ji next’s target
    Like 0
  • ranga sri @ranga sri
    i look for breach of 8.15, cmp 10.6
    Like 0
  • xtemp abc @xtemp abc
    Good stock to hold for long term.👍
    Like 0
  • xtemp abc @xtemp abc
    This is only analysis not an advise for investment. Good analysis Aayush. You have visionary approach.
    Like 2
  • Girish Kandhari @Girish Kandhari
    Let we know who is Aayush Khanna a dummy writer or a learned adviser . Whether he is SEBI registered or ……….?
    Like 1
    • Sarath AP @Sarath AP
      if you not interested his analysis just unfollow
      Like 4
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  • Girish Kandhari @Girish Kandhari
    Keep away from penny stocks always.
    Like 0
  • Siddharth Singh @Siddharth Singh
    FY22 PAT -958Cr, Market cap 153.5Cr only, Dont Trap..
    Like 7
  • Siddharth Singh @Siddharth Singh
    FY22 PAT -958CrMarket cap 153.5Cr onlyDont Trap..
    Like 5
  • Michelle jims @Michelle jims
    Don't invest blindly in stocks or crypto when you do not have a proper guide. I lost 30k trying to trade on my own but ever since *Mrs* MILENA AYRTON stepped in, I have been making huge profits. I made over 450k since September. She is always available to tell you more about investing and give a guide on how to trade. *Milena ayrton fxtrade* can be reached on instagram
    Like 6
  • Abhi jeet @Abhi jeet
    With due respect to the author I have a total CONTRADICTORY view backed by data. If your money is hard earned, please do not get into any such stocks, period. The Reason: Test 100 past charts guys, in markets, a falling stock keeps falling crushing hopes of naïve dip buyers. Rest is own discretion.
    Like 6
    • Michelle jims @Michelle jims
      Don't invest blindly in stocks or crypto when you do not have a proper guide. I lost 30k trying to trade on my own but ever since *Mrs* MILENA AYRTON stepped in, I have been making huge profits. I made over 450k since September. She is always available to tell you more about investing and give a guide on how to trade. *Milena ayrton fxtrade* can be reached on instagram
      Like 2
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  • Ria Singh @Ria Singh
    thanks 👍
    Like 2
    • Michelle jims @Michelle jims
      Don't invest blindly in stocks or crypto when you do not have a proper guide. I lost 30k trying to trade on my own but ever since *Mrs* MILENA AYRTON stepped in, I have been making huge profits. I made over 450k since September. She is always available to tell you more about investing and give a guide on how to trade. *Milena ayrton fxtrade* can be reached on instagram
      Like 3
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  • Navaldeep Sharma @Navaldeep Sharma
    but that's a regular gap up in downtrend. It's like it will going down after this for atleast ten days.
    Like 1
  • klinton Hobbs @klinton Hobbs
    I personally recommend milena ayrton on; Forex Tradingt⭐ Crypto Tradingt⭐ Stocks Tradingt⭐ Commodities Tradingt⭐ Index Tradingt⭐ Bonuses & Rewardst ⭐ Regulation & Safety⭐ It left now for you to start your trading in a legit and trustworthy platform Chat MILENA AYRTON FXTRADE on Instagram now.
    Like 0
  • Sandeep Patel @Sandeep Patel
    Its A Double Bottom Formation on Monthly Time Frame
    Like 0
    • klinton Hobbs @klinton Hobbs
      I personally recommend milena ayrton on; Forex Tradingt⭐ Crypto Tradingt⭐ Stocks Tradingt⭐ Commodities Tradingt⭐ Index Tradingt⭐ Bonuses & Rewardst ⭐ Regulation & Safety⭐ It left now for you to start your trading in a legit and trustworthy platform Chat MILENA AYRTON FXTRADE on Instagram now.
      Like 2
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  • Praveen reddy @Praveen reddy
    how many days target
    Like 2
    • klinton Hobbs @klinton Hobbs
      I personally recommend milena ayrton on; Forex Tradingt⭐ Crypto Tradingt⭐ Stocks Tradingt⭐ Commodities Tradingt⭐ Index Tradingt⭐ Bonuses & Rewardst ⭐ Regulation & Safety⭐ It left now for you to start your trading in a legit and trustworthy platform Chat MILENA AYRTON FXTRADE on Instagram now.
      Like 2
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  • Praveen reddy @Praveen reddy
    how many days target
    Like 0

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