SARDAEN: Triangle Breakout, Chart of the WeekWhy NSE:SARDAEN Triangle Breakout Could Signal the Next Big Move in it, let's analyze in "Chart of the Week" Post Strong Q1 FY26 Results
As per the Latest SEBI Mandate, this isn't a Trading/Investment RECOMMENDATION nor for Educational Purposes, it is just for Informational purposes only. The chart data used is 3 Months old, as Showing Live Chart Data is not allowed according to the New SEBI Mandate.
Disclaimer: "I am not a SEBI REGISTERED RESEARCH ANALYST AND INVESTMENT ADVISER."
This analysis is intended solely for informational 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.
Price Action Analysis:
• Stock has exhibited a strong uptrend from 2022 lows around ₹120-140 to current levels of ₹534.95
• Major rally phase from mid-2023 onwards, gaining over 300% in approximately 18 months
• Current consolidation phase since late 2024, around ₹400-600 range, indicates institutional accumulation
• Recent price action shows formation of higher lows with resistance being tested multiple times
Volume Spread Analysis:
• Volume spikes during major breakout moves confirm institutional participation
• Recent consolidation accompanied by relatively lower volumes, typical of the accumulation phase
• Volume breakout above 7.11M suggests renewed interest at current levels
• Volume pattern supports the bullish bias with buying interest on dips
Key Technical Levels:
Base Formation:
• Primary base established between ₹400-₹430 levels during 2024 consolidation
• Secondary base forming at ₹480-₹500 range as recent support
• Base width of approximately 8-10 months indicates a strong foundation for the next leg up
Support Levels:
• Immediate Support: ₹480-₹500 (recent swing lows and 50-day moving average area)
• Strong Support: ₹420-₹440 (previous resistance turned support)
• Major Support: ₹380-₹400 (long-term trend line support and 200-day moving average)
Resistance Levels:
• Immediate Resistance: ₹560-₹580 (recent highs and psychological level)
• Major Resistance: ₹600-₹620 (all-time high zone and round number resistance)
• Extended Resistance: ₹680-₹720 (measured move projection from triangle pattern)
Technical Pattern Recognition
Symmetrical Triangle Pattern:
• Clear triangle formation visible from the chart with converging trend lines
• Triangle spans approximately 8-10 months, indicating a significant pattern
• Breakout direction typically follows the prevailing trend (bullish in this case)
Trend Line Analysis:
• Primary uptrend line intact from 2022 lows, providing dynamic support
• Resistance trend line from 2024 highs is being challenged multiple times
• Converging trend lines creating the triangle pattern setup
Fundamental and Sectoral Backdrop:
Company Fundamentals:
• Market Cap: ₹18,852 crore (up 88.40% in 1 year)
• Revenue: ₹5,350 crore with profit of ₹941 crore (TTM)
• Business Model: Manufacture of sponge iron, ferro alloys, billet, wire-rod, and iron ore pellet through Steel, Ferro, and Power segments
• Promoter Holding: 73.16% indicating strong management confidence
• Dividend Policy: Low payout at 7.69% of profits over the last 3 years, suggesting reinvestment focus
Sectoral Outlook:
• Steel Industry: India is the world's largest steel producer with strong domestic demand
• Ferro Alloys Market: Global market projected to grow from $156.37 billion in 2024 to $204.2 billion by 2032 at 5.60% CAGR
• Indian Ferrosilicon: Market valued at $347.7 million in 2022, estimated to grow at 5.0% CAGR through 2030
• Infrastructure Push: Union Budget 2025-26 increased capital investment outlay for infrastructure by 11.1% to ₹11.2 lakh crore
Growth Lever:
• Integrated business model across the steel value chain provides operational synergies
• Strong promoter holding indicates alignment with minority shareholders
• Beneficiary of India's infrastructure development and steel demand growth
• Consolidation phase completion, suggesting readiness for the next growth phase
Key Risk Factors:
• Commodity price volatility affecting margins
• Working capital days increased from 78.1 days to 119 days, indicating efficiency concerns
• Current valuation appears overvalued by 52% compared to intrinsic value
• Global steel demand fluctuations and trade policy changes
Market Catalysts:
• Government infrastructure spending and PLI schemes
• 2025 outlook suggests potential upturn in steel producer activity with lower input costs and shifting trade policies
• Iron ore production increased by 5.5% to 135 MMT in FY 2024-25, supporting raw material availability
• Ferro Alloys industry poised to reach $188.7 billion by 2025, driven by a robust economy
Full Coverage on my Newsletter this Week
Keep in the Watchlist and DOYR.
NO RECO. For Buy/Sell.
📌Thank you for exploring my idea! I hope you found it valuable.
🙏FOLLOW for more
👍BOOST if you found it useful.
✍️COMMENT below with your views.
Meanwhile, check out my other stock ideas on the right side until this trade is activated. I would love your feedback.
As per the Latest SEBI Mandate, this isn't a Trading/Investment RECOMMENDATION nor for Educational Purposes, it is just for Informational purposes only. The chart data used is 3 Months old, as Showing Live Chart Data is not allowed according to the New SEBI Mandate.
Disclaimer: "I am not a SEBI REGISTERED RESEARCH ANALYST AND INVESTMENT ADVISER."
This analysis is intended solely for informational 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.
