MCX shares extend gains, up 5% in 2 days; how strong is this upside?

Shares of Multi Commodity Exchange of India Ltd (MCX) continued to trade higher for the second consecutive session in Thursday's trade, climbing 1.25 per cent to hit a high of Rs 8,018.50. At this level, the stock has gained 4.80 per cent in two trading days.

The recent upmove in the share price followed Securities and Exchange Board of India (Sebi) chairperson Tuhin Kanta Pandey's announcement that the regulator is considering steps to broaden participation in commodity markets.

Pandey said Sebi is examining a proposal to allow foreign portfolio investors (FPIs) to trade in non-cash settled, non-agricultural commodity derivatives. The capital market regulator also plans to engage with the government on permitting banks, insurance companies and pension funds to participate in commodity trading.

The Sebi chief added that by December 2025, commodity-specific brokers would be integrated into the Samuhik Prativedan Manch, a common reporting system for compliance filings.

On the technical front, MCX's counter traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). Its 14-day relative strength index (RSI) came at 55.85. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The stock has a price-to-earnings (P/E) ratio of 82.89 against a price-to-book (P/B) value of 22.99. Earnings per share (EPS) stood at 96.33 with a return on equity (RoE) of 27.74. According to Trendlyne data, MCX has a one-year beta of 1.7, indicating high volatility.

Around 16,000 shares were last seen changing hands today on BSE. The figure was lower than the two-week average volume of 26,000 shares. Turnover on the counter came at Rs 13.08 crore, commanding a market capitalisation (m-cap) of Rs 40,718.88 crore.

Rupak De, Senior Technical Analyst at LKP Securities, noted that the stock has moved up significantly post a sharp decline over the preceding few weeks. "In the short term, the trend is likely to remain strong. On the higher side, it may move towards Rs 8,500, while on the lower side, support is placed at Rs 7,750," he added.

MCX, the country's first listed exchange, is a commodity derivatives exchange that facilitates online trading of commodity derivatives transactions.