Technical Check: 80% in a year! Navin Fluorine on the cusp of breaking 5-month range

Navin Fluorine rose 80 per cent in a year compared to the 24 per cent upside seen in the Nifty50 in the same period, but there is potential for more upside as the stock is at the cusp of breaking out from a 5-month range.

The stock with a market capitalization of over Rs 21,000 cr hit a 52-week high of Rs 4,339 on 28th December and the trend turned sideways. The recent price action pushed the stock towards the breakout range.

Navin Fluorine rose more than 11 per cent in last week, and over 26 per cent in the last 3 months, data from Trendlyne showed.

A close above Rs 4,329 is likely to open doors for a fresh breakout towards Rs 4,835 that translates into an upside of over 13 per cent from Rs 4,258 recorded on 1st February, suggest experts.

Established in 1967, Navin Fluorine International (NFIL) operates one of the largest integrated fluorochemicals complexes in India with manufacturing locations at Surat and Dahej in Western India and Dewas in Central India.

NFIL is present in four business verticals viz. refrigeration, inorganic fluorides, CRAMS and specialty fluorochemicals, said an ICICIdirect report. The brokerage firm expects revenue growth of mid to high teens and an annual capex of around Rs 200-300 crore per year.

Chemical stocks are witnessing renewed buying interest after a shallow retracement of the last three to four months.

Navin Fluorine has been an outperformer within the chemical space-maintaining higher peak and higher trough in all time frames.

“It is currently on the cusp of generating a breakout above the last five month’s broad range (4,329-3,203) and the base of the entire consolidation is at the 52-weeks EMA (currently at 3477). This signals strength and offers a fresh entry opportunity,” Pankaj Pandey, Head Research at ICICI Securities Ltd, said.

The brokerage firm expects the stock to extend the current up move and head towards 4835 levels in the coming month as it is the 161.8% external retracement of the recent breather (4,329-3,500). A stop-loss can be placed below Rs 3,898.

In a smaller time frame, the stock has retraced its previous 20 session’s corrective decline (4,329-3,500) in just five sessions. A faster retracement in less than half the time interval signals a robust price structure, it said.

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