Vimta Labs registers a double-bottom pattern breakout; what does it mean for traders?

Vimta Labs registers a double-bottom pattern breakout; what does it mean for traders?

Indian Market
by 5paisa Research Team Last Updated: 2022-10-14T11:17:59+05:30

VIMTALABS has soared nearly 4% during Friday’s trading session.

The Indian indices witnessed a huge gap-up amidst a strong short-covering rally across global markets. Quality smallcap stocks have seen fresh buying interest at lower levels and attractive valuations.

The stock of Vimta Labs Ltd (NSE Code: VIMTALABS) has jumped nearly 4% amid strong buying sentiment. With this, it has registered a double-bottom pattern breakout on the daily chart. Such a breakout is considered very positive for medium-term upmove. After a steep correction of about 25% from its prior swing high level of Rs 421, the breakout has attracted stronger volumes. The volumes tend to be above average from the past few days, the price structure depicts a positive picture for the stock in upcoming trading sessions.

From the technical perspective, the stock has witnessed an improvement in strength. The 14-period daily RSI (58.41) is rising steadily and is above its prior swing high. The ADX points northwards and shows good trend strength. Meanwhile, the MACD has seen a strong upmove and indicated upside potential. The Elder Impulse system indicates a fresh buy. The stock now trades above all its key moving averages. Overall, the stock has become technically strong, and we can expect a good rally in times to come.

In the past one year, the stock has delivered over 20% returns and has outperformed most of its peers. In its June quarterly results, the company reported a 29% YoY jump in revenue while its net profit grew nearly 50% YoY to Rs 12 crore in June 2022.

Vimta Labs Limited works in the domain of clinical studies and analytics, advanced molecular biology, and environmental studies. With a market capitalisation of about Rs 800 crore, it is one of the fastest-growing companies in its sector.

Currently, the Vimta Labs share price trades at Rs 364 level on NSE. Long-term investors as well as momentum traders should include this stock in their watchlist to track its further development.


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