With Nifty Metal Index breaking out today, lets see how Shyam MetalicsNSE:SHYAMMETL can play out from here...
Stock was clearly in downtrend, making Lower Highs and Lower Lows (blue & red highlights on the chart).
But it can reverse from here now. How? Here are some observations:
- It recently took support at IPO Price - Made first Higher High (green highlight) - Currently facing resistance from 14th Sep AVWAP (Rs. 354). - Can take support at 20th Dec AVWAP (Rs. 338) - Crossing above Rs. 354 will most probably break the support-turned resistance zone of Rs.360 too with force. - Later, it can face resistance from 22nd July AVWAP (Rs. 383) and come to retest the Rs. 360 area. - There should be no looking back once it crosses the 22nd July AVWAP - Company has high ROE (above 20%) and currently trades at lower valuation multiples than its peers.
Disclaimer: Do not consider this as a trade recommendation.