NOCIL Ltd: Chemical star emerges with a long-term breakout

As markets consistently set new lifetime highs on a weekly basis, the chemical sector has emerged as a notable outperformer in the month of January 2024, just ahead of the budget. Among the chemical stocks, NOCIL Ltd. stands out as a shining star, ready to exhibit a long-term continuation breakout.

Stock analysis
A few trading sessions ago, NOCIL Ltd. registered a significant long-term continuation breakout spanning over two years, accompanied by robust volumes. Subsequently, it entered a broad-range consolidation phase, akin to a throwback rally after the breakout, finding support from the breakout trend line of the mentioned pattern.

During this throwback rally, the stock retested the breakout trendline, forming a solid base. In the most recent trading session, it exhibited a 5.25% rally with substantial volume, surpassing the total fall of the throwback move. This indicates a potential initiation of a fresh upward trajectory.

Additionally, the 14-day RSI indicator comfortably resides in the bullish zone around the 61.94 level. The close above SUPERTREND (ATR 10-Multiplier 1) further underscores favourable momentum.

Stock performance
In recent sessions, NOCIL surged to a high of Rs 284.50 from the support of the breakout trendline level at Rs 263.30 and closed at Rs 279.85, confirming the continuation of the uptrend characterized by higher highs and higher lows. Following this breakout, the stock holds the potential to reach Rs 370, representing a substantial 40% gain from the breakout level.

NOCIL Ltd. has captured the attention of both swing traders and long-term investors, presenting a promising opportunity for further upside potential in the dynamic and evolving chemical sector. As this sector remains in the spotlight, NOCIL’s performance positions it as a significant player for those seeking growth and potential returns in the realm of speciality chemicals.

About the company
Incorporated in 1961, NOCIL is a key player in the chemical industry, specializing in the manufacture of rubber chemicals primarily used by the tire industry and other rubber processing sectors. As part of the Arvind Mafatlal Group, it holds the distinction of being the largest rubber chemicals manufacturer in India. The company’s product portfolio includes accelerators, antioxidants, pre-vulcanization inhibitors, and post-vulcanization stabilisers.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.