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- Oct 31, 2022 - Why Sugar Stocks Are Like Diwali Soanpapdi
Why Sugar Stocks Are Like Diwali Soanpapdi
When you analyse various sectors on the charts, stocks tend to trade in the same trend with their peers. Historically, that's not the case with sugar stocks.
In the last 6 months, some of the sugar stocks lost their sweetness and are down by 30-50% while a few are trading near their 52-week highs.
It is difficult to judge why the sugar stocks are falling but technically, they seem to be an 'avoid'.
Equal Weighted Sugar Index (EWSI)
EWSI is the proprietary index created using sugar stocks with a minimum marketcap of Rs 15 bn as of 30 October 2022.
On the weekly chart (left), the index has reversed from the resistance turned support and is now trending bullish.
Historically, the index has respected the support and headed to new highs.
On the daily chart (right), the index has hurdles at the 3,136-3,165 zone.
Sugar stocks are like Diwali Soanpapdi. It's the best sweet to gift. I believe the sector is in Soanpapdi mode - gift it but don't consume.
Though there are few stocks which are trending bullish, at some point they may correct with the sectorial trend.
The best time to invest should be on dips to 2,500-2,600 zone on the EWSI. The CMP is 2,935.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...
Brijesh Bhatia Research Analyst and expert chartist, is the editor of Alpha Wave Profits. Fully committed to his craft, Brijesh has mastered the art of making money by trading using technical analysis. Brijesh has an MBA from ICFAI and 16 years of experience in India's financial markets. He began his career on Dalal Street as commodities dealer and it wasn't long before he developed his own unique trading system. Brijesh worked on his trading system until it could be expected to deliver 5 units of return for every unit of risk.
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Kapil Joshi
Nov 4, 2022Dhampur Sugar is trading at around 200 which is way below its high of around 600.Is a reversal possible in near future considering the increase in ethanol prices.