Archean Chemical Industry: An undervalued Chemical Gem

Aug 5, 2023

ACI is looking ripe for a breakout in the near future. ACI has been languishing at 500-550 price level since 18th April 2023. However the candlesticks that have appeared on 3rd and 4th August 2023 gives hints about an upcoming bull run which could see it cross the 650 mark.

Technical Analysis: Since 8th June 2023, ACI has been on a continuous downtrend but on August 3rd after opening at 495 (the lowest price it had reached in 2023), it formed a green candle and followed it up with a green candle the next day. Green candles have appeared showing a characteristic of hitting the bottom and bouncing back up. StochRSI has also crossed over the indicator line and has exited from the OverSold zone. This indicates the bullish momentum in the stock.

Fundamental Analysis: With a PE ratio of 16.36, it is well below the sector PE ratio of 20.93. In the financial year 2022-23, income has risen 103%, assets increased by 14% and liabilities reduced by a massive 74% and a positive cash flow of 396 crores. Thus the stock seems undervalued for the might of its financial statements.

Strategy: You can enter at current levels (515 - 520) with a stoploss at 490. Once ACI moves above 560, you can increase the stoploss to 540 - 550. Exit the position once ACI touches 650 - 660.

Aug 22, 2023

Note

ACL has breached past its breakout price. I expect it to rise even more

Aug 28, 2023

Note

ACL has neared its target price. If you have a high risk appetite, you can hold position for 2 more weeks or else close position tomorrow if price goes above 660.