Cupid: Past Multibagger Forming Rounding Bottom BreakoutFrom ₹10 to ₹150: How CUPID Stock Became a Multibagger Dream and What's Next. Let's analyse and Deep Dive into my Chart of the Week Idea.
Price Action Analysis:
Long-term Trend Analysis:
- Primary Trend: Strongly bullish multi-year uptrend since 2023
- Trend Structure: Classic accumulation-markup-distribution pattern visible
- Price Progression: Massive rally from ₹10 levels in 2023 to ₹145+ levels
- Current Phase: Potential early stage of renewed markup phase after consolidation
Volume Spread Analysis:
Volume Profile Assessment:
- Accumulation Phases: High volume during the 2023-2024 markup phase
- Distribution Evidence: Volume spike during 2024 highs suggesting profit-taking
- Current Volume: Recent volume expansion (74.46M) confirming breakout momentum
- Volume Trend: Healthy volume participation during the current breakout phase
Volume-Price Relationship:
- Positive Correlation: Rising prices accompanied by expanding volume
- Breakout Validation: Current breakout supported by above-average volume
- Distribution Concerns: Previous high volume at peaks indicated selling pressure
Key Price Levels:
Support Levels:
- Immediate Support: ₹95-100 (recent consolidation base)
- Critical Support: ₹80-85 (previous resistance turned support)
- Major Support: ₹65-70 (rectangle pattern lower boundary)
- Ultimate Support: ₹50-55 (long-term trend line support)
Resistance Levels:
- Key Resistance: ₹145-150 (previous highs)
- Major Resistance: ₹150-155
- Target Extension: ₹170-180 (measured move projection)
Technical Indicators Assessment:
Trend Indicators:
- Moving Averages: Price clearly above major moving averages, indicatinga bullish bias
- Trend Strength: Strong upward trajectory since the consolidation base
- Momentum: Building positive momentum after prolonged consolidation
Trade Setup & Strategy:
Primary Long Setup:
- Entry Strategy: Buy on dips to ₹115-120 support zone
- Confirmation: Entry above ₹145 for momentum traders
Alternative Strategies:
Conservative Approach:
- Entry: Wait for pullback to ₹100-105 levels
- Timeframe: Medium to long-term holding period (Weekly Charts)
- Risk Profile: Lower risk, moderate reward
Aggressive Approach:
- Entry: Immediate entry at current levels (₹145)
- Timeframe: Short to medium-term momentum play (Daily Charts)
- Risk Profile: Higher risk, higher reward potential
Entry and Exit Levels:
Entry Zones:
- Zone 1: ₹115-120 (Primary entry for dip buyers)
- Zone 2: ₹145-150 (Momentum breakout entry)
- Zone 3: ₹100-105 (Deep pullback opportunity)
Target Levels:
- Target 1: ₹150-155 (Short-term objective)
- Target 2: ₹160-165 (Medium-term target based on pattern)
- Target 3: ₹180-190 (Long-term extension target)
- Ultimate Target: ₹200+ (Bull market extension)
Exit Strategy:
- Profit Booking: Book 30% at Target 1, 40% at Target 2, and the remaining at Target 3
- Trailing Stop: Implement trailing stop-loss above ₹140
- Time Stop: Review position if targets are not achieved in 8-12 months
Stop-Loss Strategy:
Stop-Loss Levels:
- Aggressive Stop: ₹110 (for entries around ₹120)
- Moderate Stop: ₹100 (for swing traders)
- Conservative Stop: ₹85 (for long-term investors)
Stop-Loss Management:
- Initial Risk: Limit to 8-10% of the entry price
- Trailing Mechanism: Move stop-loss to breakeven after 15% gains
- Pattern Stop: Below ₹95 invalidates the breakout setup
- Time-based Stop: Exit if below ₹110 for more than 2 weeks
Position Sizing & Risk Management:
Position Sizing Guidelines:
- Conservative Investors: 2-3% of portfolio
- Moderate Risk Takers: 4-5% of portfolio
- Aggressive Traders: 6-8% of portfolio (maximum)
- Sectoral Exposure: Limit total pharma/healthcare exposure to 15-20%
Risk Management Framework:
- Maximum Loss: Limit loss to 2% of total portfolio per trade
- Diversification: Don't concentrate more than 10% in a single stock
- Sector Allocation: Balance with other defensive sectors
- Time Diversification: Stagger entries over 2-3 weeks
Portfolio Integration:
- Correlation Check: Monitor correlation with other pharma stocks
- Sector Rotation: Consider the pharma sector cycle and rotation
- Market Cap Allocation: Balance small-cap exposure with large-caps
- Liquidity Consideration: Account for small-cap liquidity constraints
Risk Assessment:
Technical Risks:
- Failed Breakout: Risk of false breakout below ₹115
- Distribution Pattern: High volume at peaks may indicate selling
- Overbought Conditions: Rapid rise may lead to consolidation
- Support Breakdown: Break below ₹95 would be technically negative
Fundamental Risks:
- Valuation Concerns: High PE ratio of 96+ indicates premium valuation
- Sales Decline: The Recent 7% sales decline raises growth concerns
- Sector Competition: Increasing competition in the contraceptive market
- Regulatory Changes: Healthcare sector regulatory modifications
Market Risks:
- Small-Cap Volatility: Higher volatility compared to large-caps
- Liquidity Risk: Potential liquidity issues during market stress
- Sentiment Risk: Healthcare sector sentiment shifts
- Global Economic: Impact of global economic conditions on exports
Company Overview & Fundamental Backdrop:
Business Profile:
- NSE:CUPID is India's premier manufacturer of male and female condoms, personal lubricant, and IVD kits, established in 1993
- The company manufactures and exports contraceptives, including male and female condoms, and medical devices, with a focus on sexual health and reproductive safety, serving both domestic and international markets, supplying high-quality products to governments and NGOs
- Market capitalization: ₹3,940 crores as of July 2025, classified as a Small Cap company
Financial Performance:
- Current valuation metrics: PE ratio of 96.3 and PB ratio of 11.5
- Recent performance: Sales declined by 7.24% to Rs 61 crore in Q4 FY25 versus Rs 66 crore in Q4 FY24; however, net profit rose 2.71% to Rs 41 crore for FY25
- Long-term returns: The stock has delivered 133% returns in the last 3 years
Sectoral Growth Outlook:
- The Indian contraceptive devices market is expected to grow at a CAGR of 6.2-6.3% from 2025 to 2030
- Market size estimated at USD 264.01 million in 2025, expected to reach USD 377.61 million by 2030, at a CAGR of 7.42%
- India's pharmaceutical sector aims to grow from the current US$50 billion to US$450 billion by 2047, with India being the 3rd largest producer of drugs globally
Monitoring Parameters:
What to Look Closely at Technically?
- Weekly Close: Monitor weekly closes above ₹115 for trend continuation
- Volume Trends: Watch for volume expansion on up-moves
- Relative Strength: Compare performance with the Nifty Healthcare Index
What to Look Closely at Fundamentally?
- Quarterly Results: Track revenue growth and margin expansion
- Order Book: Monitor new contract wins and export orders
- Sector Trends: Keep track of contraceptive market growth
- Management Commentary: Follow management guidance and outlook
Now, when to exit?
- Technical Breakdown: Close below ₹95 for two consecutive days
- Volume Reversal: High volume selling at resistance levels
- Fundamental Deterioration: Significant decline in business metrics
- Sector Weakness: Broad-based healthcare sector underperformance
So, My Take:
NSE:CUPID presents a compelling technical setup with a confirmed breakout from a year-long consolidation pattern. The stock has transformed from a ₹10 stock to a multibagger, and current technical indicators suggest potential for further upside. However, premium valuation and recent sales decline warrant careful risk management. The trade offers an attractive risk-reward profile for investors willing to accept small-cap volatility in exchange for participation in a growing healthcare subsector.
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NO RECO. For Buy/Sell.
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Disclaimer: "I am not a SEBI REGISTERED RESEARCH ANALYST AND INVESTMENT ADVISER."
This analysis is intended solely for informational and educational purposes and should not be interpreted as financial advice. It is advisable to consult a qualified financial advisor or conduct thorough research before making investment decisions.
