Weekly Stock Breakouts 05th August 2022

Technical charts give a sense of what is the likely future direction of any stock breakouts. The charts are assumed to capture the news and events and factor these in the price. One of the most common ways of identifying breakout stocks with potential upside is interpreting charts and identifying the trends and price movements. Growing volumes with price stock breakouts indicate greater investor interest and signs of further upward movement in the short to midterm.

This week saw the Nifty 50 close 1.9% higher than the previous week. The charts indicate that Nifty 50 has possibly touched its lowest point in FY23 at 15200 levels in June and headed higher to close above levels of 18100 by the end of FY23.

Many stocks have resumed their upward journey along with the Nifty 50 and have risen by a more than 10% this week. Some of these stocks gave a price volume breakout with a potential to head higher in the next few weeks. Based on a propriety analytics, we have identified stocks that have given favorable breakouts on the week ending 05th August 2022.

 

Sr No	Date	Company	CMP 05 Aug 2022	Target	Time
1	05-Aug-22	Elgi Equipments	426.5	490	4-5 weeks
2	05-Aug-22	Fineotex Chemicals	244.7	275	4-5 weeks
3	05-Aug-22	KEI Industries	1400	1610	4-5 weeks
4	05-Aug-22	Lemon Tree Hotels	72.8	80	4-5 weeks
5	05-Aug-22	Solar Industries	3142	3520	4-5 weeks

 

Elgi Equipments

Sector: Industrial Machinery

Elgi Equipments manufactures a wide range of air compressors, which contribute about 92% of revenues and the remainder 8% from automotive equipment. It is the second largest air compressor company in India and counted among the top eight players globally.

Elgi Equipments’ wholly-owned subsidiary ATS ELGI has inked manufacturing agreement with VTEQ, a global leader in vehicle testing equipment based out of Spain. With this partnership, ATS ELGI will set up a world-class 7,500 square feet facility to manufacture previously imported vehicle testing equipment for the Indian market at competitive prices.

Elgi Equipment stock breaks out of resistance level of 420 with 5.8 X higher volumes and is likely to reach levels of 490 in the short term.

 

Fineotex Chemicals

Sector: Specialty Chemicals

Fineotex is engaged in manufacturing of Speciality Chemicals and Enzymes for Textile and Garment Industry, Water Treatment Industry, Leather Industry, Construction Industry, Paint Industry Agrochemicals, Adhesives and others. The plants of Fineotex are located in Navi Mumbai, Ambernath, and Selangor in Malaysia.

India’s speciality chemical sector is likely to benefit from the current global conditions. The Russia-Ukraine war and its fallout are seeing the demand for speciality chemicals shifting to India, and Indian companies are well-positioned to take advantage of this situation. Already the sector is benefiting from the China+1 sourcing policy of many importing countries.

Fineotex Chemicals has delivered investors more than 4X returns over the past two years. The stock continues its uptrend and a fresh breakout above previous resistance level of 230 will drive to higher levels.

KEI Industries

Sector: Electrical products

KEI Industries is engaged in the business of manufacturing sale and marketing of all range of power cables up to 400kv – Low Tension (LT) cables High Tension (HT) and Extra High Voltage (EHV) control and instrumentation cables specialty cables elastomeric / rubber cables submersible cables flexible & house wires winding wires which address the cabling requirements of a wide spectrum of sectors such as power oil refineries railways automobiles cement steel fertilizers textile and real estate amongst others.

In the Q3FY21 results con call, the management highlighted that enquiry pipeline is strong from infra segment. A total of Rs 8bn worth of capex is targeted over next 4 years (Rs2bn per year) which will derive Rs40-45bn of sales. 

KEI Industries continues its uptrend after breaking out of a five-month consolidation with 2.7 X higher volumes. Such stocks are great long term wealth creators if held for a period of few years. The stock has given investors returns of more than 3X over the past two years.

Lemon Tree Hotels

Sector: Hospitality

Lemon Tree Hotels is the largest hotel chain in the mid-priced segment in India. It operates 8,489 rooms in 87 hotels across 54 destinations in India and abroad under brands like Aurika (premium), Lemon Tree premier, Lemon Tree (midscale), RedFox (economy) and Keys. The location of its properties in prominent business and tourist districts supports revenue growth prospects and reduces concentration risk.

In Q1FY23, it posted net profits of Rs 13.9 crore after nine continuous loss making quarters. This is a big positive development for the hotel chain which posted losses in quarters prior to the pandemic.

Lemon Tree Hotels continues its uptrend and crosses resistance level of 70 with 4.6 X higher volumes

Solar Industries

Sector: Industrial products

Solar Industries India Limited is engaged in manufacturing of complete range of industrial explosives and explosive initiating devices. It manufactures various types of packaged emulsion explosives bulk explosives and explosive initiating systems. These are used in mining and infrastr It also operated in the defence space supplying solid propellant boosters for the Brahmos missiles.

It exports to 55 countries in the world and has recently expanded its manufacturing base to many African countries. Government initiative like Housing for All, Gati Shakti, Atmanirbhar Bharat, indigenisation of defence products and better performance from mining and infra are also expected to boost the company’s performance.

Solar Industries breaks out past the previous resistance level of 3100 with 3.5 X higher volumes and likely to head to levels of 3520 in the short term.

 

About the Author

Ketan Sonalkar (SEBI Rgn No INA000011255)

Ketan Sonalkar is a certified SEBI registered investment advisor and head of research at Univest. He is one of the finest financial trainers, with a track record of having trained more than 2000 people in offline and online models. He serves as a consultant advisor to leading fintech and financial data firms. He has over 15 years of working experience in the finance field. He runs Advisory Services for Direct Equities and Personal Finance Transformation.

Note – This channel is for educational and training purpose only & any stock mentioned here should not be taken as a tip/recommendation/advice

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