Hindustan Zinc (HZL) Breakout: Is This the Start of a Big Rally?
Hindustan Zinc Limited (HZL), established in 1966, is a leading Indian mining and resources company specializing in the production of zinc, lead, silver, and cadmium. As a subsidiary of Vedanta Limited, Hindustan Zinc holds a dominant position in the Indian zinc market, commanding approximately a 75% share.
Financial Performance:
In the quarter ending September 30, 2024, HZL reported a net profit of ₹23.27 billion, marking a 35% increase from the previous quarter.
This growth is attributed to higher zinc prices driven by increased demand from China and global supply concerns.
Revenue from silver, its second-largest business segment, increased by 20% during the same period.
Stock Performance & Trends:
On October 30, 2024, Hindustan Zinc reached a high of ₹575.
The stock later declined, hitting a low of ₹414.70 on January 13, 2025.
As of now, the price has recovered to ₹468, indicating a moderate rebound from its recent low.
Technical Analysis:
Falling Wedge Breakout: In the daily time frame, the price formed a falling wedge pattern, which has now given a breakout confirmation.
Strong Price Action on Feb 5th:
Price surged by 6.99% on February 5, 2025, signaling bullish momentum.
This was accompanied by a significant volume increase of 3.71M, compared to the last 30-day average volume of 1.3M.
The volume increased by approximately 185.38%, confirming strong buying interest.
Key Reversal Zone:
If the price faces rejection from the current level (LTP ₹468), a potential reversal zone lies between ₹432 to ₹443.90.
Resistance Levels:
Resistance 1: ₹500
Resistance 2: ₹553
Resistance 3: ₹630
Strategic Initiatives:
HZL is actively pursuing a transition to renewable energy, with plans to power its operations entirely through renewables within the next five to seven years.
This initiative aligns with India's broader strategy to reduce greenhouse gas emissions and increase the share of non-fossil fuels in electricity generation.
Ownership & Divestment:
The Indian government, which holds a 29.54% stake in HZL, announced plans to sell a 2.5% stake valued at approximately $634 million in November 2024.
Earlier in 2024, Vedanta sold a 3.3% stake in the company.
Conclusion:
Hindustan Zinc Limited remains a fundamentally strong company, benefiting from global metal demand and a steady dividend policy. However, recent stock fluctuations and technical patterns suggest strong bullish potential following the falling wedge breakout and volume surge. Traders should watch the ₹432-₹443.90 reversal zone if a pullback occurs, while ₹500, ₹553, and ₹630 serve as key resistance levels for further upside.
Financial Performance:
In the quarter ending September 30, 2024, HZL reported a net profit of ₹23.27 billion, marking a 35% increase from the previous quarter.
This growth is attributed to higher zinc prices driven by increased demand from China and global supply concerns.
Revenue from silver, its second-largest business segment, increased by 20% during the same period.
Stock Performance & Trends:
On October 30, 2024, Hindustan Zinc reached a high of ₹575.
The stock later declined, hitting a low of ₹414.70 on January 13, 2025.
As of now, the price has recovered to ₹468, indicating a moderate rebound from its recent low.
Technical Analysis:
Falling Wedge Breakout: In the daily time frame, the price formed a falling wedge pattern, which has now given a breakout confirmation.
Strong Price Action on Feb 5th:
Price surged by 6.99% on February 5, 2025, signaling bullish momentum.
This was accompanied by a significant volume increase of 3.71M, compared to the last 30-day average volume of 1.3M.
The volume increased by approximately 185.38%, confirming strong buying interest.
Key Reversal Zone:
If the price faces rejection from the current level (LTP ₹468), a potential reversal zone lies between ₹432 to ₹443.90.
Resistance Levels:
Resistance 1: ₹500
Resistance 2: ₹553
Resistance 3: ₹630
Strategic Initiatives:
HZL is actively pursuing a transition to renewable energy, with plans to power its operations entirely through renewables within the next five to seven years.
This initiative aligns with India's broader strategy to reduce greenhouse gas emissions and increase the share of non-fossil fuels in electricity generation.
Ownership & Divestment:
The Indian government, which holds a 29.54% stake in HZL, announced plans to sell a 2.5% stake valued at approximately $634 million in November 2024.
Earlier in 2024, Vedanta sold a 3.3% stake in the company.
Conclusion:
Hindustan Zinc Limited remains a fundamentally strong company, benefiting from global metal demand and a steady dividend policy. However, recent stock fluctuations and technical patterns suggest strong bullish potential following the falling wedge breakout and volume surge. Traders should watch the ₹432-₹443.90 reversal zone if a pullback occurs, while ₹500, ₹553, and ₹630 serve as key resistance levels for further upside.
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