Despite the bloodbath on D-street, Rajesh Exports surges over 7%! Time to buy?
The Asian markets fell sharply on Monday after red-hot US inflation disrupted the global sentiments.
The Indian indices melted over 2% and majority of the stocks are in deep red. However, despite of strong sell-off, Rajesh Exports has surged over 7% amid strong buying seen in the stock.
The company has signed an agreement with Telangana to set up a display fab facility which involves over Rs 24000 crore of capital as a part of the Semicon India Scheme. This is likely to have a positive impact on the company’s business and generate strong profitability.
This has cheered the investors and strong buying has seen the stock to surge massively by over 7% during the initial hours of Monday. It has recorded huge volumes which is greater than 10-day, 30-day, and 50-day average volumes. Moreover, it has surged above its 20-Day short-term moving average.
Considering its price structure, the stock has plunged over 45% since its all-time high of Rs 994.70. It is on a strong downtrend and is down by about 18% from its 200-DMA. However, after today’s surge, the technical parameters have seen a strong jump towards positivity. The 14-period daily RSI (48.33) is pointing northwards and is above its prior swing highs. Meanwhile, the other momentum oscillators show improvement in the stock.
For its medium-term to be bullish, shares of Rajesh Exports need to cross above its 50-DMA placed at Rs 600. The volumes need to remain elevated, which shall indicate a continuation of strong buying. The stock is quite oversold in recent weeks and thus, it provides a good opportunity if it crosses above the mentioned level. Failing to do so will mean the price action to be a dead cat bounce and thus, traders need to watch this stock cautiously. Meanwhile, the stock must be added to the watchlist to track its further development.
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