There has been a bearish sentiment prevailing in the Indian market in today’s session. Yesterday’s CPI data of the US seemed to have jittered the global markets, the effect of which is seen today. Although, there has been a decent recovery from the lows with the benchmark index currently trading with a cut of 0.67% to 17,947 by 11:15 AM IST.
As investors are fleeing to buy their favorite shares on this dip, one stock is gaining special attention. The company is Sterlite Technologies Limited (NS:) which has a market capitalization of INR 6,700 crores and is primarily engaged in the business of telecom products and solutions.
Image Description: Daily chart of Sterlite Technologies with volume bars at the bottom
Image Source: Investing.com
Despite a weak market, the stock is providing investors some to cover to hide. The share price of Sterlite Technologies soared over 10% to the last traded price of INR 192, but more importantly, it surged past an important resistance level of INR 180 on the daily chart. Although the stock has been recovering for quite some time, today’s move has only accelerated the up trend.
Now as the stock is clearly trading above its important resistance level, the upside potential seems quite good from here but there is a bit of resistance at around INR 200, which could be the next immediate level where the stock could take a breather.
The volume figures hold good importance on days like this. However, as it has only been a couple of hours into today’s trading session, therefore, it’s difficult to gauge the figures. But there has been a total of 3.18 million shares that have exchanged hands today so far, which is the highest volume in around 4 months. So, that’s also quite supportive of the current rally and if the broader market sentiments turn good from here, that will become even more positive for the stock.
On the downside, the stock might retrace to retest its breakout level, which is a very common phenomenon for the stock delivering a breakout. The level of INR 180 would be on the watchlist of investors to participate in the rally. However, if it falls below the previous swing low of INR 165, then the bulls could be in trouble as the reliability of the current breakout would be negated.
Disclaimer: Any security mentioned in the above article is not a recommendation to buy/sell/hold the same.
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