MMTC shares rally 43% in four sessions; can this upside momentum continue?

MMTC Ltd shares continued their sharp upward move for the fourth straight session in Friday's trade. The stock soared 13.11 per cent to hit a 52-week high of Rs 79.90. At this price, the counter has rallied 42.70 per cent in just four days. On BSE, around 92.79 lakh shares changed hands today. The figure was more than five times higher than the two-week average volume of 18.46 lakh shares. Turnover on the counter stood at Rs 71.14 crore, commanding a market capitalisation (m-cap) of Rs 11,425.50 crore.

The company today issued a statement regarding the increase in share volume. "We would like to inform you that there is no significant event in our knowledge which needs to be reported to the stock exchanges under Regulation 30 of the Sebi (LODR) Regulation 2015 and which may have a bearing on the stock prices/volumes of trades of the equity shares," it said.

On technical setup, support on the counter could be seen at Rs 69, followed by Rs 65. On the flip side, resistance may be seen between Rs 80 and Rs 90 levels.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said "The counter has already given an 85 per cent returns over the last two months. As we advance, Rs 65 would be credible support and resistance is seen near Rs 88, followed by Rs 90. On the indicator front, the stock looked overstretched, which might call for some correction."

AR Ramachandran from Tips2trades said, "MMTC is overbought yet bullish on the daily charts with next resistance now at Rs 85.45. Investors should be booking profits at current levels as a daily close below support of Rs 69 could lead to Rs 53 in the near term."

DRS Finvest founder Ravi Singh said, "This is a highly speculative stock but indicators are currently positive. Strong resistance could be seen at Rs 80 level."

Vaishali Parekh, Vice-President - Technical Research at Prabhudas Lilladher, said, "After a decent consolidation witnessed near the Rs 57-60 zone, the stock has indicated a decent spurt with huge volume participation. The next target price would be Rs 84."

Kush Ghodasara, Independent Market Expert, CMT, said, "MMTC has given a strong up move today with heavy volumes. It has breached all short-term moving averages. Investors can go long for a target of Rs 86 with stop loss placed at Rs 59."

The counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-, 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 78.29. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 8.80 against a price-to-book (P/B) value of 8.38.

The stock has a one-year beta of 1.34, indicating high volatility.

MMTC is an international trading company. At present, the government holds an 89.93 per cent stake in the PSU.

(Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)

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