Chart Check: This smallcap stock is showing signs of strength; buy on dips for a possible 40% upside in 6 months

Ramkrishna Forging, part of the S&P BSE Smallcap index, started its upmove after hitting a low in June 2022 and technical indicators suggest that the momentum is likely to continue.

After hitting a high of Rs 247 on 13 October 2021, the stock failed to hold on to the momentum and drifted lower.

The stock largely moved in a range on the weekly charts where Rs 200-215 acted as a stiff resistance while on the downside Rs 140-150 levels acted as strong support. It made a strong base around the support range.


Recently, the stock reclaimed its 50-Weeks Moving Average in August and the SuperTrend indicator also triggered a buy in the same month. The stock has rallied more than 27 per cent in the last 3 months.

The stock with a market capitalisation of more than Rs 3,300 crore is also seeing a rise in volumes so far in October.

Short-term traders can look at buying the stock now or on dips for a possible target of Rs 300-400 which translates into an upside of over 40 per cent in the next 6-8 months, suggest experts.

The stock is trading below 5-DMA but above 10,30,50,100 and 200-DMA which is a positive sign for the bulls.

The stock price started its up move from Rs 28 recorded in August 2020. It made a high of Rs 252 (October 21) and was trading continuously above averages.

“Profit booking followed, and lower tops were formed. The stock made a low of Rs 145.5 in June 2022. After June 22 low, higher bottom formations are visible in the stock,” Bharat Gala, President - Technical Research, Ventura Securities, said.

“During the last one year, the stock moved sideways and took support at Rs 140-150 levels. Recently, the stock has again started trading above averages and has made a high of Rs 215 above the previous swing high of Rs 214,” he said.

“The Vortex, Demand Index & MACD indicator suggest a possible firm uptrend. MACD indicator suggests a firm uptrend & Momentum in the stock,” added Gala.

“The possible targets are Rs 300-400. If the stock price corrects downwards the buy levels are 200-192-184-177-173. A stop loss to be observed in the trade is Rs 160,” he recommends.

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