Stock market selloff: One sector, three opportunities
Summary
- Amid a broader stock market selloff, the sugar sector stands out with bullish momentum, presenting unique investment opportunities. As global tensions rattle markets, select sugar stocks are breaking out, signalling potential gains for investors willing to look beyond the volatility.
As Navratri ushers in the beginning of India’s festival season, the mood should be one of celebration. However, stock markets are feeling the heat of global tensions. The recent Israel-Iran conflict has shaken D-Street, sending the Nifty plunging over 500 points to slip below the 25,300 mark on Thursday.
While geopolitical uncertainties tend to trigger temporary market dips, certain sectors are defying the trend this season. One such bright spot is the sugar industry, where select stocks are experiencing bullish breakouts, offering a sweet opportunity for investors.
Here are three sugar stocks making notable moves on Point & Figure (P&F) charts:
Bannari Amman Sugars
A major player in India’s sugar industry, Bannari Amman Sugars Ltd has a diversified portfolio spanning sugar production, power generation, and industrial alcohol, with a strong presence in Southern India.
On the Daily 3% X 3 P&F chart, the stock recently broke out of its consolidation zone at ₹3,200, retested the level, and has been trending upwards since.
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The breakout signals renewed bullish momentum, with an Anchor Column Follow-Through (AFT) pattern at ₹3,500 confirming further upside potential. Investors should watch closely as the stock may be poised for new highs.
What is a point-and-figure chart?
A point-and-figure chart is a chart method using Xs and Os. The X denotes bullish moves, while the O denotes bearish moves. Unlike traditional time-based charts, P&F charts focus solely on price changes and are considered noiseless. They filter out minor price fluctuations, highlighting significant trends and reversals. The lack of time constraints gives a clearer picture of supply and demand dynamics, helping chartists make more informed decisions.
Dalmia Bharat Sugar
Dalmia Bharat Sugar & Industries Ltd stands as one of India’s top sugar producers, known for its energy-efficient plants and a strong focus on sustainable practices. With operations spanning multiple states, the company has built a solid reputation for innovation within the sector.
As sugar stocks soar, Dalmia Sugar is riding the wave. It recently joined the ranks of those hitting 52-week or all-time highs.
On the Daily 3% X 3 P&F chart, the stock has broken out of a multi-year consolidation, signalling a resumption of its long-term bullish trend.
For more such analysis, read Profit Pulse.
With the broader momentum in the sugar sector, Dalmia Sugar’s breakout firmly places it among the top bullish candidates in this space.
Triveni Engineering & Industries
Triveni Engineering & Industries Ltd is a diversified player with interests spanning sugar production, engineering, and water treatment solutions. As one of India’s largest sugar manufacturers, Triveni has consistently positioned itself as an innovator and growth leader in the sector.
On the Daily 3% X 3 P&F chart, Triveni has broken out of its consolidation range, mirroring the bullish momentum seen across other sugar stocks. The breakout above ₹400 has significantly boosted the stock’s upward momentum.
The Bullish Anchor Column pattern adds further strength to this trend, indicating the potential for continued gains. However, a close below ₹365 could signal caution.
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With the festival season sparking optimism, the sugar sector is emerging as a sweet spot for investors. Bannari Amman Sugars, Dalmia Bharat Sugar, and Triveni Engineering are among the stocks poised to enhance portfolios as markets navigate the current global tensions. Sector-specific opportunities like these can offer promising returns in an otherwise volatile landscape.
Disclaimer: The purpose of this article is to share interesting charts, data points, and thought-provoking opinions. It is NOT intended as investment advice. For any investment decisions, please consult a financial advisor. This article is for educational purposes only.
Brijesh Bhatia has over 18 years of experience in India’s financial markets, working as a trader and technical analyst with leading firms such as UTI, Asit C Mehta, and Edelweiss Securities. He currently serves as an analyst at Definedge.
Disclosure: The writer and his dependents do not hold positions in the stocks mentioned in this article. However, clients of Definedge may or may not own these securities.
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