Top buzzing stock: Kiri Industries

The stock of Kiri industries has jumped over 6% in the first hour of Wednesday’s trading session.

Kiri Industries Limited is a smallcap company, engaged in manufacturing dyes, intermediaries, and basic chemicals. It has reported good fundamental figures over the past few years and has seen a jump in sales. With a market capitalization of about Rs 2500 crore, it is one of the most promising company in its sector.

With such positive statistics, the foreign institutional investors have constantly increased their stake on a quarterly basis and hold about 50% stake in the company. Meanwhile, the promotors and HNIs hold about 25% stake each.

The stock of Kiri industries has jumped over 6% in the first hour of Wednesday’s trading session. It was undergoing selling pressure and saw about a 15% decline in its stock price. Interestingly, the stock has formed a morning star pattern on the technical chart. The pattern is supported by above-average volumes, which is greater than 10-day and 30-day average volume. This highlights the larger buying interest in the stock. Moreover, on the weekly timeframe, the stock has formed a hammer candle which indicates buying interest at lower levels.

The technical parameters have also shown improvement in stock’s strength lately. The 14-period daily RSI has jumped above the prior swing high and is placed over 50. With today’s price action, the stock has taken out its 20-DMA, which is a sign of short term bullishness. The other momentum oscillators also hint towards the flat to the positive trend of the stock.

The stock has delivered at par returns when compared with Nifty on YTD basis. However, as per the pattern, we can expect the stock to be trading higher in the coming days. It has the potential to test the levels of Rs 520-530 in the short to medium term. Considering ongoing bullishness, positional traders can expect decent returns with a favourable risk-to-reward ratio as indicated by strong price action and above average volumes.

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