📊 Fundamental Key Points: Action Construction Equipment Ltd engages in manufacturing and marketing hydraulic mobile cranes, tower cranes, construction equipment, and agricultural machinery. The company offers a diverse product portfolio to meet various customer requirements.
Financials: Market Cap ₹17,094 Cr, Current Price ₹1,428, Stock P/E 61.7, ROCE 26.2%, ROE 18.8%.
Pros: Debt-free status, expected good quarterly performance, consistent profit growth of 24.9% CAGR over 5 years, improved debtor days.
Cons: Trading at 16.4 times its book value, decrease in promoter holding over the past 3 years.
Peer Comparison: Compared to peers in the Capital Goods sector, ACE shows favorable metrics like ROCE at 26.17% and solid profit growth.
Quarterly Results: Dec 2023: Net Profit ₹88 Cr, EPS ₹7.41, reflecting positive growth trends over the quarters.
Balance Sheet: Shows steady growth in assets over the years, with a well-managed debt profile.
Shareholding Pattern: Promoters hold majority stake, with FIIs and DIIs showing consistent interest over time.
*️⃣ Understanding the Basics - Technical Analysis First, let's break down some key terms you'll encounter in this analysis:
RBR Zones (Rally Base Rally): This pattern signifies an upward price movement, followed by a period of consolidation (stabilization without significant price changes), before another upward movement occurs.
Demand Zone: A price area where buyers tend to enter the market, causing the price to increase.
Bullish Pin Bar Candle: A type of candlestick that indicates a potential reversal of a downward trend to an upward trend.
📈 In-Depth Analysis of ACE ACE is currently trading in a very significant area, known as a Demand Zone. This zone is not just any area on the chart; it's a powerful RBR Zone formed on both the daily and weekly charts. Here’s why this is crucial:
The formation of the RBR zone was followed by the price reaching all-time highs accompanied by high volume, showing strong buying interest.
Currently, the price has retraced back to this zone, accompanied by low volume, which could mean a potential reversal or continuation of the upward trend.
Yesterday's price action closed with a Bullish Pin Bar Candle right at the Demand Zone, which often signals a turning point.
💹 Key Trading Strategy For those looking to trade ACE, here’s a straightforward approach:
Entry Point: Current Market Price (CMP) at 1428.
Stop Loss (SL): Below 1340, to protect against unexpected downward movements.
First Target: Aim for 1600 as an initial profit target.
Risk Management: Consider trailing your stop loss to lock in profits as the price moves favorably.
Disclaimer: This analysis is for educational purposes only. I am not a SEBI registered analyst. Please do your own research or consult a financial advisor before making investment decisions.
Concluding Thoughts Thank you for your engagement and feedback. Remember, trading is a journey of continuous learning and application. Feel free to ask questions or share your thoughts on this analysis!
"In trading, as in life, the risk you take is a measure of the success you seek. 🚀"