Technical Check: Breakout from 6-month consolidation range puts Astec Lifesciences stock on ‘buy’ list

Astec Lifesciences Ltd rose just over 15 per cent compared to 21 per cent upside seen in the Nifty50 so far in 2021. A 10 per cent rally in the last 5 trading sessions puts the underperformer back on buyers’ radar, suggest experts.

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The smallcap stock hit a fresh 52-week high of Rs 1590 last week on 14 December. The stock outperformed Nifty50 in the week gone by as prices rose in double digits compared to 3 per cent fall in the Nifty50 index.

The price action helped the stock to break out from the 6-month consolidation range which could push the stock towards Rs 1600-1685 levels, which translates into an upside of over 12 per cent from Rs 1494 recorded on 18 December, suggest experts.

The company with a market capitalisation of nearly Rs 3000 cr was established in 1994. It manufactures a wide range of agrochemicals and pharmaceutical intermediates.

With over two decades of experience in the development and production of selected chemicals, Astec has forged enduring relationships with large and small companies all over the world, said the company website.

In terms of shareholding, both Foreign Institutional Investors (FIIs) and Mutual Funds raised their stake in Astec Lifesciences for the quarter ended September. FIIs increased their holding sequentially from 0.19 per cent to 0.22 per cent during this period.

Meanwhile, Mutual Funds have increased their holding sequentially from 7.43 per cent to 9.08 per cent for the said quarter.

Technically, the stock is trading well above crucial short and long term moving averages of 30, 50, 100 and 200-Days Moving Averages.

With the current week’s close at Rs 1494, the stock has decisively broken out from its six months “Consolidation Range” (1470-1230) on a closing basis.

“This breakout is accompanied with huge volumes indicating increased participation. On the weekly chart, the stock of Astec LifeSciences Limited confirmed higher tops and higher bottoms formation,” Rajesh Palviya, head-technicals and derivatives at Axis Securities, said.

“The daily and weekly strength indicator RSI (Relative Strength Index) is in bullish mode along with positive crossover which supports strength in near term,” he said.

Palviya further added that the above analysis indicates an upside of 1600-1685 levels. The holding period is 3 to 4 weeks.

(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.)