BHSL Stocks Soared 7%; Showed Strong Potential For Breakout

On the weekly expiry trading session, the Nifty index commenced with a positive start, driven by global cues. Initially, some profit booking was observed during the early hours, but the market later rebounded and surged towards new highs. Amidst these positive sentiments, NIFTY FMCG witnessed an impressive rally of nearly 1%. Notably, one remarkable stock specifically from the sugar industry displayed outstanding relative strength by soaring over 7%, indicating a breakout of the “continuation pattern.”

The highlighted stock, Bajaj Hindusthan Sugar Limited (BHSL), holds a fascinating history, having been incorporated in 1931 under the name “The Hindustan Sugar Mills Limited.” The company is actively engaged in the production of sugar, alcohol, ethanol, and power generation. With operations in various segments like Sugar, Distillery, Power, and Others, BHSL offers a comprehensive range of products and services, including sugar manufacturing, by-products, bio-compost/bio-manure, quality standards, sugar quality, and procurement processes. Founded by Jamnalal Bajaj on November 23, 1931, the company is headquartered in Noida, India.

A thorough technical analysis of the stock’s performance from July 6, 2021 (Rs 24.65) to December 20, 2022 (Rs 20.15) reveals a significant trendline known as the Continuation Price Pattern, suggesting the potential for a substantial movement. Today, the stock witnessed a remarkable rally of more than 7%, supported by robust trading volumes that surpassed the average volume of the last 50 days, signalling a potential breakout in upcoming sessions.

Presently, Bajaj Hindusthan Sugar Ltd is trading just below the breakout trendline level (Rs 19) at Rs 18. Closing above Rs 19 on a daily basis would confirm the breakout of this technical price pattern, with a minimum target of approximately Rs 25, representing a potential increase of over 30% from the breakout level.

The 14-week relative strength index (RSI) indicates a comfortable position in the bullish zone at 66.80 RSI, and short-term key moving averages suggest strong momentum. Given these indicators, both momentum traders and long-term investors should consider keeping Bajaj Hindusthan Sugar Ltd on their radar for the upcoming sessions.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.