Vimta Labs soared nearly 25% in October! Will the stock continue to outperform the market?

Vimta Labs soared nearly 25% in October! Will the stock continue to outperform the market?

by 5paisa Research Team Last Updated: Dec 10, 2022 - 04:33 pm 11.6k Views
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Vimta Labs has surged nearly 25% this month amid strong buying activity from the institutions.

The October month is historically considered to be a bullish month for the Indian market. Currently, the markets are jittery amid soaring inflation, aggressive rate hikes while good corporate earnings act as a solace during these difficult times. Stock specific approach has been the key for successful profit building over the past few months, as quality midcap and Smallcap stocks provide huge opportunity for growth investing. Meanwhile, one such stock is Vimta Labs which has been a hot topic lately for its magnificent short term run of nearly 25% in October. 

Technically, the stock has registered a strong price volume breakout from its 10-month long channel pattern. It is currently trading near 9-month high, while highest volume has been observed in the month of October. What attracts traders towards this stock is its converging key moving averages. The short-term moving averages 20-DMA and 50-DMA have crossed above 200-DMA. Historically, it has been observed that this bullish crossover (also known as golden cross) has intended to outperform the border market. Meanwhile, to support this belief, the 14-period daily RSI (71.50) is in the super bullish zone and shows strong strength of the stock. The ADX lies above 35 and indicates strong trend strength. The OBV is at its peak and indicates strong buying sentiment. The MACD lies bullish while all other momentum oscillators indicate positive bias. Overall, the stock is expected to beat market performance in times to come.

In the past 3 years, the stock has already delivered nearly 300% returns to its shareholders. Recently, the company posted good results for Q2FY23 as revenue grew 5% YoY while net profit jumped 35% YoY to Rs 13.21 crore. 

Long term investors as well as momentum traders can include this stock in their watchlist to track its further progress.

Vimta Labs Ltd is a Smallcap company, engaged in leading contract research and testing for food and agri products exported from India. It assists the food industry commissions for nutritional labelling, food safety evaluations, trace analysis and shelf-life studies.

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