Technical Check: 60% returns in a year! Himadari Speciality Chemicals hitting 52-week highs could be a good EV play; time to buy?

Himadari Speciality Chemicals Ltd rose by over 60 percent in a year compared to over 19 percent upside seen in the Nifty50 in the same period. The good news is that the momentum remains intact which could take the stock towards fresh highs.

The speciality chemical stock which is part of the S&P BSE Small cap index hit a fresh 52-week high of Rs 69.75 on the BSE on 29 March.

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The stock is coming out of the congestion zone and has technically broken above a Rectangular Channel suggests a higher price target towards Rs 91-97 in the next 3-6 months, suggest experts.

Investors who already have the stock can hold it for a positional play while fresh money can be deployed now or on dips for a higher target price towards Rs 91-97 that translates into an upside of over 50 per cent from Rs 62.6 recorded on 28 March.

Globally, Himadari Speciality Chemicals (HSCL) is amongst the few completely integrated speciality carbon companies leveraging on its deep knowledge of one of the most versatile substances - Carbon.

HSCL is primarily engaged in the manufacturing of carbon materials and chemicals. The company is exposed to various industries like Plastic, Rubber, Steel, Aluminium and Automotive.

The company is the only Indian producer to commercially produce high quality anode material for Li-ion batteries that are used in electric vehicles, smartphone and energy storage devices.

The stock is trading well above all the crucial short and long term moving averages placed at 30,50,100 and 200-DMA which is a positive sign for the bulls.

This stock was in a buzz in the year 2017 as it gave a spectacular return of 5x returns in that calendar year. However, after making a top in 2018 at 195 levels the stock prices have definitely not participated in the last couple of years' bull run. 

“The fall from all-time high levels was seen with low volumes however in the last couple of years we are witnessing a base formation with a huge increase in volume indicating accumulation in this counter at lower levels,” Rajesh Bhosale, Technical Analyst, Angel One Ltd, said.

“Now if we monitor the monthly chart, the prices seem to be coming out of the congestion zone and technically seem to be Rectangular Channel Bullish breakout,” he added.

“In addition, Prices have closed above higher range of the Bollinger band on the monthly chart indicating strong trending up move in the near term post its recent consolidation phase,” highlights Bhosale.

He further added that with the government pushing for electric vehicles this company has a great potential for growth.

Considering all the above scenarios, Bhosale sense the stock is likely to get its charm back and hence recommend a buy in this counter at current levels and on dips to 60 for a target of Rs. 91 and Rs. 97. The stop loss can be placed at Rs. 49.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)