Things are cyclical. Nothing in this world is linear. Some would like to argue time is one directional but then some would say even time is cyclical bringing everything back after a certain point. In that case broadly stock market is cyclical too. This takes us to next logical step of how about the stocks. Are they cyclical too? No doubt about that. For certain stocks, owing to peculiar situation, time period of cyclicality might be of few minutes to few years but everything is cyclical.
Company is into the business of Electronic Manufacturing Services, Plastic Injection Moulding and Printed Circuit Boards and Plastic Manufacturing space.
Basically they are contract manufacturer for Brands.
- Company has recently raised equity capital thus strengthened the firepower
- Company had capacity expansion in AC segment recently
- Company will apply for PLI in AC Component segment
- New product launches are underway as per plan
- Under penetration of Consumer Durable, Work From Home, Rising income levels, Rapid urbanization are sectoral tailwind for such business.
- Rising raw material costs, energy crisis and shortage of semiconductor could be challenges.
High debt to equity ratio around 0.97, one third of the profits go in paying interest, low margin business since it is contract manufacturing, and you can put it alongside Dixon and Amber.
Enough of business and fundamental gyan, now let’s move to charts.
As you can see stock has done ATH (all time high) break out after 10 years. This is classic multiyear breakout where business is getting better, government is supportive, few players are there and market happens to like the theme too. Stock has made new ATH but if it does not close above 537 this month then it might take some more time before it runs.
You can see around 290 stock has made double bottom and rallied further. You should take it as case study and share after Jan 2020 where you could have taken the long trades on this one.
As you can see stock on great volumes broke past 10 year high and now retesting recent swing high on lower volumes. This is great sign for what lies ahead. Consolidation during first week of Oct can act as strong support for the stock if it comes to that. Given intense selling that we have seen over last few days but stock actually closed on green last day and day before bounced back sharply after 09:15 AM it is unlikely to go anywhere close to 410 again. There is good buying interest for the stock which will accentuate further in weeks to come.
This one is something that we put out last time in Dec 2020 but probably it never gave the chance to buy since it kept hitting upper circuits. That trade is not part of Tracker because it was just mentioned in Thread.
You can use the 404 as the negation level and it was shared on Oct 20, 2021 for the range of 430-480. Do run it through your checklist before doing anything.
Let us know what you think about this or any other thing for that matter in comment section.
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