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CHART-SPOTTING : MONTHLY DEEPAK FERTILIER (1158) 09.04.25

 

In these tumultuous times, if a stock has managed to hold its own, that itself is creditable. If now, it shows signs of wanting to move higher, then it becomes noteworthy. And that is the situation apparent on the charts of Deepak Fertiliser.

 

Deepak Fertiliser is in the business of fertlisers, agri services, bulk chemicals, mining chemicals etc. The company is the only manufacturer of solid Technical Ammonium Nitrate in India (used in mining and explosives), the second largest manufacturer of Nitric Acid in SE Asia (a crop nutrition product). It also offers a variety of fertilizer products.

Though it has been a slow and steady mover, it seems like it may be getting set for some action ahead as the chart pattern and the performance numbers are appearing attractive. With and ROE of 16% and an EPS of 16 (below industry average) and a good jump in margins in the last few quarters, matters appear to be revving up. Chart is also revealing some interest.

Long term chart reveals a slow build up in the form of a rounding pattern from 2017 thru 2022. Then a breakout and a pullback to the top of the rounding followed. Using that as a support and picking up fresh volumes, the stock has well to rise in 2024 to a high of 1400 levels. From there we see a mild pullback now, which again, is taking support at the 2024 breakout area near 985.
Currently trading at 1158, the stock appears to be ready for the next round of rises. The oscillator charts are in support of this view as they have just pulled back mildly along with the prices. Some good news, perhaps in the form of better Q4 results could provide fresh triggers.

Given the positive set up in its fundamentals and technicals, this could be a low risk bet at current levels and on pullbacks to around 1000.

 

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