Chemical stocks are witnessing renewed buying interest after a shallow retracement of the last three months. The domestic brokerage and research firm ICICI Securities expects the chemical space to continue its primary uptrend. Deepak Nitrite is its preferred pick within chemical stocks.
The stock is seen rebounding taking support at the lower band of the rising channel in place since March 2020 and the rising 20 weeks EMA (exponential moving average), thus offering a fresh entry opportunity with a favourable risk reward set up, the brokerage house said in a note.
ICICI Securities Buy rating on the specialty chemical stock comes with a target price of ₹3,010 per share and stop loss of ₹2,418 with time frame of up to 3 months.
“Key point to highlight since April 2020 is that the base formation above 20 week’s EMA offered an incremental buying opportunity on multiple occasions, highlighting inherent strength that augurs well for next leg of up move,” the brokerage’s note added.
The stock, during the current week’s trade, has generated a breakout above the last 11 week’s broader consolidation range ( ₹2500-2000), thus opening upside towards ₹ 3010 as it is confluence of the previous all-time high of October 2021 and the measuring implication of the last 11 weeks range breakout, ICICI Securities highlighted.
Deepak Nitrite is a chemical manufacturing company. The Company’s segments include basic chemicals, fine and speciality chemicals, performance products and phenolics. The basic chemicals segment offers sodium nitrite, sodium nitrate, nitro toluidines, fuel additives, and nitrosyl sulphuric acid. The multibagger stock has surged 158% in a year’s period whereas the counter is up 36% in the last six months.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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