Top trading ideas from the Chemical sector

The chemical sector includes a variety of businesses like Agrochemicals, Pesticides and Fertilizers, Specialty chemicals, etc.

The chemical sector stocks came into the limelight since the beginning of the pandemic. Many stocks have more than doubled from their respectively lower levels and the sector had witnessed nothing less than a fairy tale kind of story.

The chemical sector includes a variety of businesses like Agrochemicals, Pesticides and Fertilizers, Specialty chemicals, etc.

In this article, we shall analyze the performance of the sector leaders from a short to medium-term perspective. We have included United Phosphorous Limited (UPL), SRF Limited and Aarti industries for the analysis for the same.

First, let’s compare the performance of these stocks.

UPL: 63.8% YTD and 0.43% 3-month performance (CMP- 761.65)

SRF: 94.12% YTD and 18.72% 3-month performance (CMP- 2164.80)

Aarti Industries: 59.76% YTD and 3.63% 3-month performance (CMP- 985.15)

We observe that SRF has been the top performer for the medium term as well as for the short term. These chemical stocks were going through the correction phase after hitting their respective all-time high. UPL is down by 11%, SRF is down by 14.2% while Aarti Industries is down 15.2% from its all-time high. Since then, the stocks look for bottoming out and are on a verge of starting their fresh upward journey. Surely, these stocks have a lot to catch up on.

The stocks are trading at value-buy price and one can also think about investing in such high-quality stocks.

On November 17, UPL is currently down by almost 3% and SRF is down by 1.17% while Aarti Industries is up by 2.85%.

UPL and SRF are currently taking support of its 50 and 20-DMA while Aarti industries look to test its short-term resistance of 20-DMA. The RSI of UPL, SRF and Aarti industries is at 56,49, and 51 respectively. Decent volumes have been witnessed in these stocks since a few trading sessions. The stocks look for fresh triggers as they look to continue their upward journey. We do not see any signs of huge downfall and one can expect good returns percentage for the short to medium term. Market participants should closely keep an eye on these stocks as they look to find the momentum.