From the last many sessions, the benchmark index is more or less trading in a range. However, there is no dearth of interesting breakouts in the small and midcap spaces. Investors are becoming stock-specific in an attempt to rake up some decent gains amid a flat market.
Today, one stock that has come under the spotlight that is catching investors’ attention is CreditAccess Grameen Ltd (BO:). The company is in the business of providing micro-financial services and is focused towards the rural poor and low-income households, particularly women. With a market capitalization of INR 15,866 crores, the financials of the company seem good.
In FY22, it clocked an 11.52% YoY growth in net revenue to INR 2,750.13 crores, while the consolidated net income soared over 170.8% to INR 363.04 crores in the same period. As a result, the current EPS of 23.31 is the highest since FY19. Interestingly, CreditAccess Grameen has increased its net income at a yearly rate of 35.22% over the last 5 years, not bad for a rural area-focused lender!
Image Description: Daily chart of CreditAccess Grameen with volume bars at the bottom
Image Source: Investing.com
The shares price of CreditAccess Grameen had been consolidating in an increasingly narrowing range, since June 2022. The volatility contraction in the stock was clearly evident till now. Today, the stock delivered a clear breakout from the symmetrical triangle pattern on the daily chart which is one of the most prominent volatility contraction patterns. As the stock broke above the upper trendline resistance of INR 1,060, the trend from here could be deemed to be highly positive.
The breakout volume has also been noteworthy. As of 12:38 PM IST, the stock recorded a volume of 441.7K shares which is the highest one-day volume in over 1.5 months. The volume expansion on the breakout is depicting mass participation in this move which increases the reliability of the breakout.
Currently, the stock is trading 5.1% up at INR 1,069, clearly sustaining above the breakout level (as of now). If the stock closes above INR 1,060, then it would confirm the breakout and the impending move from thereon. The theoretical target of this pattern comes at around INR 1,330 in the near future. On the downside, the rising trendline of this pattern is expected to act as the nearest support level for the stock, and a fall below it would make the rally skeptical.
