Falling Wedge Breakout in KRBL Ltd
Our Focus
In our last write up we caught Balrampur Chini & it is working well. Now we found one more stock that is ready for up moves and it belongs to the FMCG sector.
Market Sentiment Analysis
Recently, the nifty has broken the downtrend channel & confirmed a trend stop. Then we have seen some profit booking & rest of market near 200 DMA. As we expected nifty has given a bounce from the same & finally crossed the strong supply zone of 17800. If we look at the chart then nifty has confirmed Inverted H&S on the daily chart. Based on that we can say that now the market trend is bullish and ready for 18400-500.
In this positive & green market, KRBL is showing the strength of up moves. Let’s discuss step by step.
Company Business Module
KRBL belongs to the FMCG sector and its key product is Basmati Rice. It is the worlds leading basmati rice producer and distributor in India. Their focus is seed development, contract farming, procurement of paddy, storage, packing, processing, marketing, and branding. They are engaged in other rice products like bran oil, furfural, rice bran, and deoiled cakes. They have 13 brands like Taj Mahal, Doon, Nur Jahan, etc. KRBL is in captive power generation and it uses it for its operations.
Technical Analysis
From September 2018 bears have taken handover and the share price fell from 680 to 90. After the first lockdown share price showed a good rally with all FMCG shares. Then it went into a sideways zone. In September 2022 the share price has given a breakout to its strong resistance of 335 with volumes and touched to 440 levels. The share price again came down near 335 and now that is reacting like strong support. While falling it has made a Falling Wedge and it is a positive signal.
Fundamental Analysis
- Products are essential and demanding in the market.
- Debt is nominal and the company has reduced debt.
- Net profits are increasing.
- The company is focusing on business expansion.
- Promoters have a shareholding of around 60%.
Why Share Price Can Go Up?
The share price has made a base near strong support of 335 and in the last weekend it has given a breakout to Falling Wedge. That is the trend change confirmation and volumes are increased. As per our view, the share price is again ready for 450/500 levels. The strong support is 335.
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Disclaimer: The contents produced here are purely for educational purposes. They should not be construed as buy/sell recommendations. Readers are advised to consult their Investment advisor before making any decisions based on the above write-up.
