Momentum Play: Stock Rallies Over 3%, More Room Left Till Resistance!
Undoubtedly, there were many stocks in today’s session which were cheered by investors for their decent intraday gains. The sugar space has been one of the buzzing sectors today with many stocks spreading sweetness across the sector.
One stock from this sector is Balrampur Chini Mills Ltd. (NS:) which currently seems to be in momentum. Talking about the company first, it is an integrated sugar manufacturing company with a market capitalization of INR 7,114 crores and is engaged in the manufacturing of sugar, ethanol and power.
Image Description: Daily chart of Balrampur Chini Mills with volume bars at the bottom
Image Source: Investing.com
The stock had been swinging up and down for the last few weeks, giving traders clear trading opportunities. Since mid-May 2022, the stock is oscillating and taking support near INR 335 – INR 340 on the lower side and facing resistance at an increasing pace. This means that the sellers have been initiating their sell positions at increasingly aggressive levels which turned the peaks of the stock into a consistently lower high formation.
In simple words, the stock had been making lower highs for the entire period it had been oscillating up and down. This also enabled technical analysts to draw a falling trendline adjoining the peaks of the stock which gives a visual appearance of the diagonal resistance level. Keeping this strong resistance in mind, the stock is again heading toward this level and is currently trading near INR 360.15. The trendline resistance is coming at around INE 380, which gives a decent runway of around INR 20 from the CMP on the upside.
This is the least distance that the stock is expected to cover as seen from the movements from the recent past. However, if somehow the stock is able to clear this resistance level this time, it could start a whole new move on the upside till the nearest level of INR 430 which is the first peak of this oscillation phase.
If the stock turns back prior to reaching the trendline resistance, then the nearest level where it can take support is around INR 335 – INR 340. This is time-tested support and is expected to keep the stock from falling further. Today’s volume was a bit higher than the volume of the last few days, at 1.66 million shares which is a good sign as an increasing volume in the direction of the trend is good because it increases the reliability of the move. Also, investors should keep a tab on volume when the stock retraces from here. If the stock falls on a lighter volume, then the upside momentum could still be relied upon, however, if volume expands on a down move then it could be troublesome for long holders.
Undoubtedly, there were many stocks in today’s session which were cheered by investors for their decent intraday gains. The sugar space has been one of the buzzing sectors today with many stocks spreading sweetness across the sector.
One stock from this sector is Balrampur Chini Mills Ltd. (NS:) which currently seems to be in momentum. Talking about the company first, it is an integrated sugar manufacturing company with a market capitalization of INR 7,114 crores and is engaged in the manufacturing of sugar, ethanol and power.
Image Description: Daily chart of Balrampur Chini Mills with volume bars at the bottom
Image Source: Investing.com
The stock had been swinging up and down for the last few weeks, giving traders clear trading opportunities. Since mid-May 2022, the stock is oscillating and taking support near INR 335 – INR 340 on the lower side and facing resistance at an increasing pace. This means that the sellers have been initiating their sell positions at increasingly aggressive levels which turned the peaks of the stock into a consistently lower high formation.
In simple words, the stock had been making lower highs for the entire period it had been oscillating up and down. This also enabled technical analysts to draw a falling trendline adjoining the peaks of the stock which gives a visual appearance of the diagonal resistance level. Keeping this strong resistance in mind, the stock is again heading toward this level and is currently trading near INR 360.15. The trendline resistance is coming at around INE 380, which gives a decent runway of around INR 20 from the CMP on the upside.
This is the least distance that the stock is expected to cover as seen from the movements from the recent past. However, if somehow the stock is able to clear this resistance level this time, it could start a whole new move on the upside till the nearest level of INR 430 which is the first peak of this oscillation phase.
If the stock turns back prior to reaching the trendline resistance, then the nearest level where it can take support is around INR 335 – INR 340. This is time-tested support and is expected to keep the stock from falling further. Today’s volume was a bit higher than the volume of the last few days, at 1.66 million shares which is a good sign as an increasing volume in the direction of the trend is good because it increases the reliability of the move. Also, investors should keep a tab on volume when the stock retraces from here. If the stock falls on a lighter volume, then the upside momentum could still be relied upon, however, if volume expands on a down move then it could be troublesome for long holders.