Chart Check: Up 150% in a year! This smallcap which gave a range breakout in April makes a good buy on dips stock

HBL Power System Ltd, a smallcap company, has rallied more than 150 per cent in a year compared to about 15 per cent upside seen in Nifty50 in the same period, but the upside may not be over yet.

The stock with a market capitalization of around Rs 2,200 cr hit a 52-week high of Rs 86.40 on 26 April but saw mild profit taking post that. Investors can look at buying the stock on dips towards Rs 62-68, suggest experts.

HBL Power System builds mission-critical electronics systems & solutions. It is part of the S&P BSE Smallcap index.


The stock was largely trading in a 20-point range so far in the year 2022 on the weekly charts, where Rs 70-75 remained the top resistance level while Rs 50-50 acted as a support.

Foreign investors decreased their holding in the stock from 11.25 per cent to 9.15 per cent in the March quarter, data from Trendlyne showed.

The stock surpassed the resistance level to hit a fresh 52-week high last week which could now take HBL Power System towards Rs 100-135 levels in the next 6 months, suggest experts.

In terms of price action, HBL is trading above crucial short and long-term moving averages of 20,50,100, and 200-DMAs which is a positive sign for bulls.

The stock price started its up move from Rs 15 (Sept 2020) to Rs 83.60 (Feb 2022), making a series of higher bottoms & consolidation patterns.

During the move, the stock continuously traded above averages, and the super trend indicator was also in a positive mode. From November 21, the uptrend in stock prices was supported by above-average volumes.

“Recently, the stock gave range breakouts and made a high of Rs 74.7 accompanied by highest weekly volumes since 2020. The Demand Index, KST, & PVT Indicator suggest the possibility of a strong up move on positive side,” Bharat Gala, President - Technical Research, Ventura Securities Ltd, said.

“The possible targets are Rs 100-135. If the stock price corrects downwards, the buy levels are (Rs 71-68)-Rs 66-(Rs 64-62). A stop loss can be observed in the trade is Rs 57,” he added.

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