Triveni Engineering & Industries sugar stock registered a solid breakout; don’t miss the action

Thursday was a historic day for the NSE benchmark Nifty 50 as it marked a fresh all-time high of 20,167.65. Moreover, the broader market indices, Nifty Mid-Cap and Nifty Small-Cap saw not only a strong follow-through buying post-formation of candlestick pattern near their rising 20-day SMA but also an outperformance compared to the frontline indices.

Sugar stocks were in the limelight, driven by expectations that El Nino conditions might dent output and drive up the sweetener prices. One of the stocks from the Sugar sector that caught our attention is Triveni Engineering and Industries Ltd. Uttar Pradesh sugar companies with higher sustainable sugar volume and higher realisation are expected to benefit from lower sugarcane yields in Maharashtra and Karnataka.

Triveni Engineering & Industries is a diversified industrial conglomerate with core competencies in sugar, alcohol, power transmission and water. The company is one of India’s largest integrated sugar manufacturers and one of the largest ethanol manufacturers. It is located strategically in the sugarcane-rich western and central belt of UP. The company is among the top 3 manufacturers in India for sugar and the second highest supplier for ethanol.

Technically, the stock has broken out of a 65-week-long cup pattern with higher volume. For the last four weeks, the volumes were recorded above average. Its price Relative Strength line is at a new high, showing an outperformance compared to the broader market. The stocks also traded at new lifetime highs and cleared all resistances. It is in uncharted territory and trading 23.44 per cent above the 50 DMA and 32.05 per cent above the 200 DMA. All long-term averages are in the uptrend.

The Weekly MACD is above the zero line and shows a strong bullish momentum. After more than a year of consolidation, the RSI has shifted its range into the strong bullish zone. The KST and TSI have given a fresh buy signal, while the Weekly Elder’s impulses have formed consecutive bullish signals. In short, the stock has registered a bullish breakout with consistently higher volume. The stock has support placed around the level of Rs 340 and on the upside level of Rs 425-450 is likely to act as a hurdle in the short to medium term.

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.