resr 5paisa Research Team 13th December 2022

Stocks priced under Rs 25 with dragonfly doji pattern and upside potential

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The Indian stock market has been trying to regain all of the lost momentum and has scaled back after seeing a bottom at about 15% below the peak level attained a few times over the last twelve months. The pre-Diwali rally saw the top indices coming within a touching distance of the all-time highs.

Investors who bank on technical analysis or patterns in the price and volume movements of a stock typically use candlestick charts or use it along with other parameters to predict price movements of stocks in the future.

One such parameter is the ‘dragonfly doji’, a Japanese candlestick pattern which hints at the possibility of a trend reversal. On the candlestick chart it has a ‘T’ shape due to a trading day that starts with a decline and then a reversal to close right near the opening price.

If we twine it with a bearish trend like the market has behaved in the recent past it could suggest some stocks that could see an uptick.

If we apply this to all the stocks, we get a set of 140 companies. Of these there are no large caps and just four mid-caps: Apollo TriCoat, Elgi Equipments, Caplin Point and FDC. Rest all are small and microcap firms with many being penny stocks.

Filtering them further for penny stocks that are priced less than Rs 25 a share and have a market value less than Rs 100 crore we have around 68 companies.

These include names like Pasupati Spinning, Asian Petroproducts, Shri Krishna Devcon, Omkar Pharmachem, Innovassynth, Acme Resources, Rishi Laser, Sita Enterprises, Indo Euro Indchem, JMJ Fintech, LWS Knitwear, Sylph Technologies, ACCEL, CHL, Global Capital, Banas Finance, Panjon, Classic Leasing, Shalimar Wires, Hypersoft Tech, Mehta Integrated Fin and Neelkanth Rock-Miner.

Others in the pack include TGB Banquets, Kisan Mouldings, Patspin India, H S India, Beryl Securities, India Infraspace, Goenka Business, Riga Sugar Company, Econo Trade, Lypsa Gems, Ramgopal Polytex, Spectra Industries, Ekam Leasing & Fin, Gopal Iron & Steels, Fraser & Company and Anjani Finance, among others.

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