Gujarat State Fertilizers & Chemicals saw a wide gap-up opening and rallied 20 percent on April 26, becoming the top gainer in the Nifty500 index despite moderate gains in the benchmark as well as broader markets. This was in addition to a 3-percent rally in the previous session. The stock closed at Rs 153.30.
The stock has formed robust bullish candlestick on the daily charts, with huge volumes, the highest in a single day this calendar year.
The single day rally was so sharp that it has decisively broken its long downward sloping resistance trendline adjoining highs of April 5, 2022 and January 9, 2023. Also, the stock traded well above all key moving averages (21, 50, 100 and 200-day EMA - exponential moving average).
Momentum indicators RSI (relative strength index 14) at around 80 showed strong positive crossover, though it is near oversold levels, on the daily charts, and even on the weekly scale, it has given a positive crossover.
MACD (moving average convergence divergence) having above zero line looked strong on the daily scale, and on the weekly timeframe, it has given a positive crossover but below equilibrium line.
After a stellar run, we have asked experts about their opinion on the stock of GSFC, which were mixed.
Vidnyan Sawant, AVP - Technical Research at GEPL Capital, said the stock of GSFC has shown a consistent support level around Rs 120 since December 2021, and recently, the descending triangle pattern was broken during the latest trading session, indicating a potential uptrend.
Hence, he feels it is likely that prices may continue to rise until they reach the Rs 180 level, where a stop-loss of Rs 150 on a closing basis must be kept.
On an intraday basis, the stock hit a high of Rs 151.70, the highest level since December 16 last year, while if it closes above Rs 150 level, then that would be the highest level since September last year.
But Mehul Kothari, Head of Technical Research at Anand Rathi, raised doubts over the sustainability of this rally as he said the stock had multiple previous swing highs in the zone of Rs 152 – 158. It would be difficult for the stock to take out this zone, he feels.
Hence, he expects some cool off from here on or may be some pullback too. On the downside, Rs 136 seems to be a strong support for short term, he said.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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