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Small & Midcap Mantra | After rallying more than 300% in a year, this stock is headed even higher

The stock has given rounding bottom formation breakout at 1,450-1,500 after a double bottom formation at 1,150 level. It is continuously forming higher highs and higher lows on weekly charts and is comfortably placed above all its major moving averages

June 21, 2021 / 01:57 PM IST
Image: Pixabay

Image: Pixabay

 
 
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APL Apollo Tubes Ltd's stock price has rallied more than 300 percent in a year compared to a 55 percent rally in the Nifty during the same period.

This year, too, APL Apollo has outperformed the benchmark index, up more than 75 percent compared to over 12 percent rally in the Nifty and 16 percent gains in the BSE 500 index.

APL Apollo, with a market capitalisation of more than Rs 19,000 crore, hit a fresh 52-week high of Rs 1,598 on June 17, 2021 and is on track to surpass Rs 1,900 in the next six-12 months, experts said.

Long-term investors should stick with the stock. The initial target to watch out for would be Rs 17,10 and a stop loss to keep for long positions would be below Rs 1,350, they said.

“Traders can go long on APL Apollo Tubes on any dips towards 1,500 with stop loss of 1,350, and an immediate target could be placed around Rs 1,710,” Astha Jain, Senior Research Analyst at Hem Securities said.

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“The stock has given rounding bottom formation breakout at 1,450-1,500 level after making double bottom formation (at) 1,150 level. It is continuously forming higher highs & higher lows on weekly charts,” she said.

A rounding bottom pattern is plotted by a series of price movements which graphically resembles a ‘U’. The pattern is formed at the end of a downward price movement. The stock fell from Rs 1,448 recorded on March 31 and made a bottom at Rs 1,177 on 14 May 2021.

APL Apollo

“On the weekly charts, MACD crossed above its signal line which qualifies bullish trend in the stock. It is comfortably placed above all its major moving averages. We believe that stock is poised for a strong upside rally with a medium-term target of 1,700-1,710 and a long-term target of 1,900.

Also, on the weekly charts, MACD crosses above its signal line, which qualifies a bullish trend in the stock. The stock is comfortably placed above all its major moving averages, again a bullish sign.

“We believe that stock is poised for strong upside rally with a medium-term target of 1,700-1,710 and long term target of 1,900,” Jain said.

APL Apollo Tubes Limited is the largest producer of structural steel tubes in India. APL Apollo Tubes Q4FY21 consolidated results were better than analyst estimates but the second Covid-19 wave has affected volumes.

Most analysts, however, maintain a buy rating on the counter. IDBI Capital maintains a buy rating with a target price of Rs 1,606. Axis Securities also has a buy, with a target of Rs 1,595.

Disclaimer: The views and investment tips expressed by 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.
Kshitij Anand is the Editor Markets at Moneycontrol.

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