TechnoFunda Trade Oppportunity- Pondy Oxides CMP 172, Upside Open 35%

August 4, 2020

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Strategic Alpha

PONDY OXIDES CMP 172, STOP OF 154, UPSIDE OPEN TILL 232,

TIME PERIOD 8 WEEKS, RISK/REWARD:1:3.5

The rationale for the Trade:-

TECHNICAL FRONT

Pondy Oxides has created a classical Upflag pattern and has broken out of the long term downward sloping trendline. After a few weeks of consolidation, the stock is poised to make quick up moves as it has not broken down with moving average crossover on weekly charts. It created an Upflag Pattern on the week ended 19th June 2020 and still, the pattern is intact. Volumes are drying up in the counter after the recent consolidation after the breakout, It’s a low equity stock, with just 55.75 Lakh Shares, so whenever volumes dry up, any buying trigger can make to stock to surge highs quickly.

FUNDAMENTAL FRONT

I have covered the entire story and rationale of pondy oxides as a potential multi-bagger in my old blog, click this link to read https://bit.ly/2Xq20Gj

Recent Developments and Possible Triggers:-

  1. Taking advantage of low prices amid panic during lockdown promoters have increased their stake from 46.70% to 48.74%.
  2. Despite Pandemic and Lockdown Promoters have reduced their Debt from 142 Cr in March 2019 to Just 52 Cr Now in year Ended March 2020. Debt to Equity is just 0.34 Now.
  3. Lead Prices are Trading Near Breakout Point, Which can prove to be one of the triggers for the up move
  4. I believe Old Economy stocks will be leaders of the next bull market, click here to read my whole assessment about this here https://bit.ly/2Xouws6

PATTERN STUDY CHART

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The author of the blog Mr.Suyog Dhavan is a Full-time Investor / Value Trader and Value investing/Trading Mentor. His style of Investing is inspired by Mohnish Pabrai, Peter Lynch, and Porinju Veliath. He is the founder of Strategic Alpha Wealth, A Premier stock market mentorship firm with a mission to touch the lives of 1Lakh people through its mentorship program.

3 Comments

  1. Debasish Jana

    Dear Strategic alpha, I am holding 2500 share from 2017. Is it possible to go again its all time high Rs 750. If possible how many days it will take to reach that price, and please mention its long term (around 3 years) target?

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