Chart Check: This smallcap nearly doubled investor wealth in 2022! Why it's a good buy-on-dips stock

Vadilal Industries which almost doubled investors' wealth so far in 2022 compared to 6 per cent fall seen in the Nifty50, and 10 per cent drop recorded in the S&P BSE small-cap index is still a good buy-on-dips stock for long-term investors.

The small-cap stock with a market capitalisation of nearly Rs 1,300 crore hit a 52-week high of Rs 1,850 earlier on May 9. The stock has been taking support near the Rs 1,645 levels in May.

It closed 1.7 per cent higher at Rs 1,805 on Tuesday.

The stock has seen a one-way rally so far in 2022, and investors willing to put fresh money can look at buying the stock on dips towards 1,628-1,560-1,490-1,450, suggest experts.

Vadilal Industries is trading well above most of the short- and long-term moving averages of 5,10,20,50,100 and 200-DMA which is a positive sign for the bulls.


The stock price started its up move from Rs 827 (Jan 2022) to Rs 1,850 (May 2022), making a series of higher tops and higher bottoms, supported by volumes.

During the move, the stock continuously traded above averages and the supertrend was in positive mode. The stock always bounced taking support of the averages and continued its uptrend supported by volumes.

“The profit booking zone had very low volumes and again up move started in April 22 area which suggests weak buyers were bought out by strong buyers. The Vortex and PVT Indicators indicate buying strength in the stock,” Bharat Gala, President- Technical Research, Ventura Securities, said.

A Vortex indicator is used to spot trend reversals and confirm the trend while the PVT indicator or the price volume trend indicator is a momentum-based indicator used to measure money flow.

“The possible targets are Rs 2,000-Rs 2,300. If the stock price corrects downwards the buy levels are (Rs 1,628-Rs 1,560) - (Rs 1,490-Rs 1,450). Stop loss to be observed in the trade is Rs 1,380,” he added.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)