Some companies remain unharmed despite the lower emotions that are dominating today’s session following the US Fed’s 50 basis point rate rise last night and a little hawkish remark for the upcoming year. One such stock offering investors some protection in this choppy session is Visaka Industries Ltd (NS:VSKI).
With a market capitalisation of INR 784 crores, the firm primarily manufactures cement. Over the last several months, the cement industry has performed well, with heavyweights like UltraTech Cement Ltd (NS:ULTC), ACC (NS:ACC), and others seeing strong rallies. However, Visaka Industries’ shares underwhelmed, which prevented it from reaching new swing highs.
The stock finally appears to have stabilised after a notable decline that saw it go from INR 664 in September 2022 to INR 435 in November 2022. It also totally stopped further decline. The main cause of a sideways trend was the demand from the lower levels, which has now obviously begun to balance the supply.
The previous downturn has come to an end, but the uptrend has not yet started. For over a month, the
stock had been consolidated in a sideways range. This sort of conduct is typically a strong indicator of either a trend continuance or trend reversal. How can one discover the ultimate course of action? It’s easy. One can presume that the consolidation is an accumulation period leading to an upward movement if the stock breaks the range’s resistance. On the other side, it may be referred to as a distribution phase and would indicate an imminent decline if the supply increases and violates the range’s support.
The resistance of this range, which is present at about INR 466 in the case of Visaka Industries, appears to be about to be broken. As of 11:31 AM IST, the intraday high was INR 468, and the CMP was INR 464.3, indicating that the resistance had been momentarily broken during the day. The exchange-traded volume reflects the robust demand that sent the price above the barrier. A total of 64.4K shares have been traded as of this writing, which is 136% more than the 10-day average volume of 12.7K shares.
If the stock rises over the resistance, it may begin to climb upward, at least to a level between INR 495 and INR 500. This distance is about equivalent to the consolidation range’s height. In the event that the trend changes from here, the lower end of it, or INR435, would be the crucial mark to keep an eye on.
Disclaimer: I own shares of Visaka Industries in my investment account.