Stock Breaks ‘Downward Channel’; Begins Uptrend with 3% Jump!
The index is trading on a flat note with a slight bullish tilt but many counters are racking up decent gains. One such counter is Uti Asset Management Co Ltd (NS:) which is a smallcap asset management company with a market capitalization of INR 9,581 crores. The FY22 revenue of the company soared to a record high of INR 1,327.27 crores which translated into an all-time high profit of INR 534.29 crores.
The stock is also in the portfolio of astute investors with the DIIs holding 46.54%, mutual funds holding 13.6% and FIIs holding a 6.25% stake, as of September 2022. The current dividend yield of 2.78% also makes it an attractive small-cap.
Coming to the valuations, the stock is trading at a P/E ratio of 17.93, compared to peers such as IIFL Wealth Management (NS:), Nippon Life India Asset Management Ltd (NS:) and HDFC Asset Management Company (NS:), all of which are trading at a P/E of 27.64, 22.57 and 33.15, respectively.
Image Description: Daily chart of UTI AMC
Image Source: Investing.com
The stock had been rallying since the last few sessions after PNB (NS:) received regulatory approvals to sell its stake in the company (UTI AMC). A couple of sessions back the stock rose above the falling trendline resistance of a downward-sloping channel. This is a pattern that reflects a clear downtrend in the stock. The stock tends to bounce off from the resistance (upper trendline of the channel) and support (lower trendline of the channel) as it progresses through the downtrend.
This is a reversal pattern and once the stock breaks the upper trendline, a trend reversal is confirmed, which happened on Monday. After that, the stock had consistently been trading outside the channel making the reversal more promising.
Today, UTI AMC shares rallied 3.4% to the day’s high of INR 773.9 and are inching towards the next resistance level of around INR 800. This level might come in a few sessions, however, a rally above it might need a stronger demand. Once that happens, then it would structurally become more robust and might touch the preceding peak of INR 895.
The stock surged over 8.5% last week and is up 3%+ this week so far, therefore a profit booking could come. However, even that won’t change the bullish stance unless the previous structural low of INR 656 gets taken out.
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The index is trading on a flat note with a slight bullish tilt but many counters are racking up decent gains. One such counter is Uti Asset Management Co Ltd (NS:) which is a smallcap asset management company with a market capitalization of INR 9,581 crores. The FY22 revenue of the company soared to a record high of INR 1,327.27 crores which translated into an all-time high profit of INR 534.29 crores.
The stock is also in the portfolio of astute investors with the DIIs holding 46.54%, mutual funds holding 13.6% and FIIs holding a 6.25% stake, as of September 2022. The current dividend yield of 2.78% also makes it an attractive small-cap.
Coming to the valuations, the stock is trading at a P/E ratio of 17.93, compared to peers such as IIFL Wealth Management (NS:), Nippon Life India Asset Management Ltd (NS:) and HDFC Asset Management Company (NS:), all of which are trading at a P/E of 27.64, 22.57 and 33.15, respectively.
Image Description: Daily chart of UTI AMC
Image Source: Investing.com
The stock had been rallying since the last few sessions after PNB (NS:) received regulatory approvals to sell its stake in the company (UTI AMC). A couple of sessions back the stock rose above the falling trendline resistance of a downward-sloping channel. This is a pattern that reflects a clear downtrend in the stock. The stock tends to bounce off from the resistance (upper trendline of the channel) and support (lower trendline of the channel) as it progresses through the downtrend.
This is a reversal pattern and once the stock breaks the upper trendline, a trend reversal is confirmed, which happened on Monday. After that, the stock had consistently been trading outside the channel making the reversal more promising.
Today, UTI AMC shares rallied 3.4% to the day’s high of INR 773.9 and are inching towards the next resistance level of around INR 800. This level might come in a few sessions, however, a rally above it might need a stronger demand. Once that happens, then it would structurally become more robust and might touch the preceding peak of INR 895.
The stock surged over 8.5% last week and is up 3%+ this week so far, therefore a profit booking could come. However, even that won’t change the bullish stance unless the previous structural low of INR 656 gets taken out.