Shares of Gujarat Fluorochemicals surged 4 percent and hit a record high of Rs 3,980 on September 9 driven by a surge in trading volumes in the counter. As much as 15 lakh shares of the company changed hands on the exchanges so far, significantly higher than the one-month daily traded average of four lakh shares.
At 2.10 pm, shares of Gujarat Fluorochemicals were trading over 3 percent higher at Rs 3,932 on the NSE, despite coming off its record high.
In addition, the stock was also among the top weekly picks for brokerage firm Axis Securities. The firm highlighted that the stock has broken out above the “Symmetrical Triangle” pattern at
Rs 3,675-level with a strong bullish candle on the weekly chart, which according to Axis Securities, signals the onset of a medium-term uptrend.
The brokerage further noted that volume activity in the counter decreased during the pattern formation and surged at breakout, signalling heightened market participation. The volume in the counter has consistently been above the one-month daily traded average for the past three sessions.
“Additionally, the RSI (Relative Strength Indicator) broke above the downward-sloping trendline, confirming the price breakout,” Axis Securities wrote while suggesting that this indicates a further upside in the stock towards Rs 4,090-4,300.
On account of the strong technical indicators of the stock, Axis advised investors buy the scrip in the range of Rs 3,700-3,626 for a period of three-four week, with a stop loss at Rs 3,450.
Further, even though the company reported a dismal set of earnings for the April-June quarter, but that was largely due to logistical headwinds amid the Red Sea crisis and pricing pressures due to continued dumping by China.
Regardless, analysts maintain a much hopeful outlook for the company’s future. Brokerage firm KR Choksey noted that the company’s earnings could see a boost from the successful commercialisation of its battery chemicals segment and increasing demand for new fluoropolymers. This will be fuelled by a robust growth in the semiconductor industry and advancements in emission control applications.
The stock also remains one of the top picks in the specialty chemicals sector for Nuvama Institutional Equities. The firm feels that players such as Gujarat Fluorochemicals, which are focused on new-age industry applications such as battery chemicals and semiconductors, shall start entering into long-term arrangements, which would ensure structural growth.
