Deepak Nitrite Shows Signs Of Reversal: SEBI RA Eyes Upside If  ₹1,850 Holds

While Deepak Nitrite’s technical indicators may suggest a short-term downtrend, weekly charts indicate strong buying interest.

The stock is forming a potential double bottom pattern, with heavy buying interest noted this week, according to SEBI-registered analyst Deepak Pal.

Although the stock continues to trade below its key 14-day, 55-day, and 200-day EMAs, technical indicators like the Parabolic SAR and moving average convergence/divergence (MACD) still signal a short-term bearish trend.

However, Pal added that the stock’s price action since June 20 suggests a recovery is underway, with the stock rebounding from a low of ₹1,865.

This week’s candle is particularly encouraging, with the stock opening at ₹1,880, dipping slightly to ₹1873.90, then rallying to ₹1,989 before closing at ₹1,984.60, which is close to its 14-day EMA, the analyst noted.

Over the past two weeks, the stock has consistently respected the crucial ₹1,850 support zone. At the time of writing, Deepak Nitrite was trading 1.3% down at ₹1,958.6.

The analyst added that as long as the stock holds above ₹1850, a “buy on dip” strategy could be applied by long-term investors.  If the recovery continues, the stock could soon retest its 200-day EMA, opening up room for further upside in the coming sessions.

The company specializes in chemical manufacturing, including advanced intermediates and phenolics, with operations spread across Gujarat, Maharashtra, and Telangana. It is backed by strong fundamentals, including an ROCE of 25%, ROE of 14%, minimal debt, and healthy liquidity.

The company recently announced its foray into the specialty fluorochemicals segment. It is investing ₹3,500 crore to expand production of its core products, Phenol and Isopropyl Alcohol.  

Year-to-date (YTD), the stock has fallen 21.7%.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Share

·

Add us on