Stock Under Rs 35: Hits 20% Upper Circuit, Volume Soars 2,000%!

  • Stock Market Analysis

In the midst of a positive session, many stocks have been raking up big gains. With a lot of action been witnessed in the small and midcap spaces, Vakrangee (NS: VAKR ) is one stock that remained under the spotlight in today’s session. The company is in the business of providing solutions across e-Governance Projects and Vakrangee Kendra. 

It is a small-cap company with a market capitalization of INR 2,918 crores and the stock is roughly 2.79x more volatile than the Nifty 50 index. In FY22, the company more than doubled its revenue to INR 782.61 crores and surged past its pre-pandemic FY20 revenue of INR 767.73 crores. The consolidated net income also surged 74.44% on a YoY basis to INR 109.53 crores in FY22, which is the highest profit since FY18.

It’s interesting to note that such a small company also has around 8.25% of FII stake which is generally not seen. DIIs also hold roughly 6.32% ownership in the company, which reflects the confidence of astute investors in the future prospects of Vakrangee.

Image Description: Weekly chart of Vakrangee showing a falling trendline breakout

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There are some interesting developments that have occurred in the stock chart today. The stock had been falling consistently for a very long time. The stock tanked from a high of INR 69.85 in December 2020 to the 52-week low of INR 23.55, marked in June this year. Every rally during the fall had been a selling opportunity for investors as the stock kept on trending down. The fall also resulted in the formation of a crystal-clear downward sloping trendline on the daily chart which kept the stock from rising during the plunge.

This is a major trendline that finally seems to have been broken today with a massive force. The break of the falling trendline depicts that the downtrend has finally changed to an uptrend. But more importantly, the thrust with which the stock surged past this trendline resistance has further increased the chances of a potential uptrend.

Vakrangee shares hit an upper circuit of 20% to INR 33.05 in today’s session and closed almost at the day’s high. The massive demand for the stock was also seen through the volume spike. A total of 37.7 million shares exchanged hands today on the NSE which is an eye-popping 2,029% increase over the 10-day average of 1.77 million shares (recorded yesterday).

As the breakout and trend reversal is confirmed, the upside range till which it might travel is around INR 39 - INR 40. This would be a level where more sellers could come and overpower the bulls. If the stock falls below its recent swing low of INR 27, then the rally could become skeptical. As there has been a 20% move today, a retracement in the next few days should not surprise investors.

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  • Vijay Kalunge @Vijay Kalunge
    Third Classs Compannny Purelyyy Opartorrr Drivennnnnnn
    Like 1
  • Pratik Goradia @Pratik Goradia
    What about vedenta stock?
    Like 0

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