Chart Check: After 30% in a month, this smallcap stock may take out October 2021 highs in 6 months

DCW, part of the BSE Smallcap index, has rallied by about 30 per cent in a month and technical indicators suggest that the momentum is intact which could help the stock to surpass October 2021 highs.

The petrochemical stock rallied from Rs 40 recorded on August 16 to Rs 53.75 as on 13 September which translates into a rally of more than 32 per cent in a month.

It is a low-volume stock, but short-term traders can look to buy the stock on dips for a possible target above Rs 70 in the next 6 months, suggest experts.


The stock hit a 52-week high of Rs 65.95 on October 6, 2021, but failed to hold on to the momentum. It bounced back after hitting a low of Rs 33.55 on 21 June, 2022. Since then, the stock has been in an uptrend.

DCW has generated great success to emerge as one of India's fastest-growing multi-product multi-location chemical companies. It is an industry pioneer with a strong presence in the Chlor-Akali, Synthetic Rutile, and PVC business segments, the company website said.

Recently, the stock recently gave a range breakout above Rs 51.50 on the weekly charts in September. The stock was seen moving in a range since November 2021 where levels above Rs 51 acted as resistance while support was seen at Rs 40 level.

A breakout confirms the strength of the trend. Hence, short-term investors can look to buy the stock on dips towards Rs 47-40, suggest experts.

On the price front, the stock is trading above its short- and long-term moving averages of 5,10,20,30,100, and 200-DMA which is a positive sign for the bulls.

The relative strength index (RSI) is at 66.2. RSI below 30 is considered oversold and above 70 is considered overbought, Trendlyne data showed. MACD is above its center and signal Line, this is a bullish indicator.

The stock price started its upmove from Rs 7 (March 2020). The stock was seen making a series of higher tops and higher bottom formations and finally the stock made a high of Rs 66 back in October 2021.

“The stock entered the profit booking zone and corrected to Rs 33.55 (June 2022). The stock made lower tops and lower bottoms & traded within and below the averages during the corrective mode,” Bharat Gala, President - Technical Research, Ventura Securities, said.

“The stock recently gave a range breakout and crossed the previous swing high of Rs 51.50, making a new recent high of Rs 54.60, accompanied by supportive volumes,” he said.

The Aroon Up/Down, MACD and Demand Index Indicator suggest a possibility of crossing the all-time high of Rs 66, explains Gala.

The possible targets are Rs 70-100. If the stock price corrects downwards the buy levels are Rs 47-44-40, he recommends. A stop loss to be observed in the trade is Rs 34.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)