Midcap stock Jupiter Wagons jumps to all-time high, quadruples money in 1 year. Time to sell?

Jupiter Wagons share price: Shares of Jupiter Wagons continued witnessing buying interest for the fourth consecutive session on Friday, May 10, as they surged over 18 per cent to hit their fresh all-time high of ₹498 in intraday trade on BSE.

Jupiter Wagons share price opened at ₹430.50 against its previous close of ₹420.65 and rose 18.4 per cent to the record high level of ₹498. The stock finally closed 16.08 per cent higher at ₹488.30 apiece on BSE.

The Q4 boost

Shares of Jupiter Wagons have been rising lately, buoyed by the company's March quarter number.

Jupiter Wagons, on May 7, reported a whopping 168 per cent year-on-year (YoY) jump in consolidated profit (attributable to owners) to ₹105.2 crore for Q4FY24 against a profit of ₹39.21 crore in the same quarter last year.

Revenue from operations for the quarter under review jumped 57 per cent YoY to ₹1,115.41 crore from ₹711.70 crore.

EBITDA for the quarter jumped 59 per cent YoY while EBITDA margin rose 20bps YoY.

The board of directors recommended a final dividend of ₹0.30 per share.

Jupiter Wagons is a provider of freight wagons, locomotives, passenger coaches (LHB), braking systems, metro coaches, commercial vehicles, ISO marine containers, and products such as couplers, draft gears, bogies, and CMS crossings.

Also Read: Hindustan Zinc stock soars 11% to new high as board approves 500% interim dividend

Jupiter Wagons share price trend

Jupiter Wagons' share price has quadrupled, surging 336 per cent, over the last year.

The stock hit its 52-week low of ₹110.75 on May 11th last year. 

On a monthly scale, the stock is up over 17 per cent in May so far, following an over 9 per cent gain in April.

Time to buy, sell or stay invested?

Most analysts are largely positive about the stock from a short-term perspective.

Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers pointed out that over the past week, Jupiter Wagons has shown consistent trading behaviour within a relatively narrow price range, oscillating roughly between ₹400 and ₹456. However, in the current trading session, it has notably surpassed this range and maintains its position well above it.

Also Read: Indian diagnostics chains on the cusp of inflection, says Emkay; initiates coverage on these 2 stocks with 'buy'

Patel observed that this significant breakout indicates a potential shift in market sentiment towards the stock. During this breakout, Jupiter Wagons also surpassed two important resistance levels: the R3 and R4 Camarilla pivot resistance levels monthly.

"Despite this bullish breakout, further upward momentum for Jupiter Wagons hinges on its ability to close above ₹457, specifically identified as the R4 Camarilla pivot resistance. Achieving this milestone could confirm the bullish trend continuation, potentially enticing traders to consider long positions," said Patel.

"Traders might contemplate initiating a long position with an optimistic target set around ₹510, reflecting an anticipation of continued price appreciation. To safeguard against potential adverse price movements, it is advisable for traders to establish a stop-loss order at ₹450," said Patel.

Mandar Bhojane, an equity research analyst at Choice Broking pointed out that the stock's upward momentum is supported by a consistent pattern of higher highs and higher lows on the daily chart, accompanied by robust trading volume. These patterns underscore a strong upward trajectory in the stock.

Bhojane observed that the Relative Strength Index (RSI) stands at 76.83 and is on an upward trend, signifying a significant surge in buying momentum. Both RSI and Stochastic RSI in the overbought region suggest that positional traders may consider holding their positions and implementing a trailing stop-loss.

Also Read: Stock market today: Why is India VIX Index skyrocketing during Lok Sabha elections?

"The overall trend for Jupiter Wagons is bullish, with confluence from various technical indicators reinforcing the optimistic outlook. Given these signals, there is potential for the stock to achieve a target price of ₹571 in the near term," said Bhojane.

"It is advisable to consider buying on dips, particularly around ₹440, capitalising on potential retracements in the stock price. To prudently manage risk, implementing a stop loss at ₹400 is recommended," said Bhojane.

Milan Vaishnav, CMT, MSTA, the founder and technical analyst of Gemstone Equity Research and ChartWizard FZE, underscored that over the past many months, Jupiter Wagons was seen trading in a defined and broad trading range; it has not participated in the broader market rally that happened over the past months.

Instead, the stock continued trading in a defined range while resisting the high point of ₹410 formed in September last year. Since then, the stock has tested this level multiple times. Recent price action shows that Jupiter Wagons has attempted a strong multi-month breakout by moving past this trendline resistance.

"The stock is now inside the leading quadrant of the RRG and may show relative outperformance against the broader markets. The RS line against the broader Nifty 500 index is in an uptrend; it stays above its 50-period MA. The on-balance volume - OBV forming a high much ahead of this breakout showed strong accumulation in the stock and equally strong support and participation from volumes in the breakout," said Vaishnav.

"Following this strong breakout, the support for this stock has shifted higher to ₹400-410 levels. Any fresh entries should use this level as a protective stock. Investors may continue to stay invested and trail their stop loss levels higher to a close below ₹400," Vaishnav said.

Read all market-related news here

Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.