MMTC shares rally 50% in 3 sessions; here's what technical analysts say

Shares of MMTC Ltd on Tuesday rose sharply for the third straight session. The stock today soared 20 per cent to settle at a 52-week high price of Rs 62.96. It has gained 49.80 per cent in three days. The counter of public sector unit (PSU) has turned into a multibagger by rallying 101.34 per cent in six months. In response to a query raised by stock exchanges on 'Movement in Volume', the state-run firm said, "As a listed company, we would like to inform you that MMTC Ltd regularly intimates about any significant event/news that may have a bearing on the stock prices. We would like to inform that there is no significant event in our knowledge which needs to be reported to the exchanges and which may have a bearing on the stock prices/volumes of trades of the equity shares of the company."

Technical analysts were largely divided on the counter. An analyst suggested booking profits at current levels, while another believed there's more upside possible. One more of them mentioned that a weekly close above Rs 63 is crucial for further upside potential.

AR Ramachandran from Tips2trades said, "MMTC is bullish but also very overbought on the daily charts with next resistance at Rs 68.3. Investors should book profits at current levels as a close below support of Rs 60 could lead to target of Rs 44 in the near term."

Market expert Ravi Singh said, "The stock is looking strong on technical terms and momentum indicators are suggesting a strong up trend inherent in the counter. This is likely to continue in the coming weeks. The counter may touch Rs 70 level in the near future."

Kush Ghodasara, independent market expert, CMT, said, "MMTC's recent breakout from a consolidation pattern on the daily chart was driven by substantial trading volumes. However, a significant challenge lies on the weekly chart, where a steadfast resistance at Rs 63 has held since 2014. While momentum indicators are favorable, confirmation hinges on a weekly close above Rs 63. Given this uncertainty, it is prudent to avoid new positions and maintain existing ones with a trailing stop-loss at Rs 60.80."

The counter traded 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 87.22. 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 7.31 against a price-to-book (P/B) value of 6.22.

The stock has a one-year beta of 1.21, indicating high volatility. On BSE, around 67.74 lakh shares changed hands today. This was way more than the two-week average volume of 13.32 lakh shares. Turnover on the counter came at Rs 41.40 crore, commanding a market capitalisation (m-cap) of Rs 9,444 crore. There were 3,57,105 buy orders today against sell orders of nil shares.

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

Meanwhile, Indian equity benchmarks settled higher for the third straight session today, led by gains in media, pharma, consumer, technology and energy stocks. The 30-share BSE Sensex pack rose 152 points or 0.23 per cent to close at 65,780, while the broader NSE Nifty index moved 46 points or 0.24 per cent up to end the session at 19,575.

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