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Despite a weak market session, investors can find stock-specific action on the long side. One such counter that’s screaming easy money and is rising from the very bottom levels is Omaxe Ltd (NS:). It is a famous real estate developer with a market capitalization of INR 847 crore.
The stock seems to be in a firm grip of bears which can easily be gauged by looking at a one-way fall from July 2022. From INR 155 odd levels, the stock has come crashing down to the CMP of INR 49, denoting a severe cut of over 57%. Every bounce that materialized during the fall was sold off by investors as they rushed to liquidate their holdings.
Image Description: Daily chart of Omaxe with volume bars at the bottom
Image Source: Investing.com
There were a few instances that made it look like the stock would start to rally this time but the selling spree kept it from rising. This trend is no different from a strong bear run. However, today, a sign of a reversal is becoming visible that is giving a ray of hope to investors who are still long on this counter.
The stock jumped 5.3% to INR 49, by 2:32 PM IST and surged past the upper trendline resistance of a falling wedge pattern on the daily chart. This pattern looks like a triangle, however, the key difference is both the trendlines of a falling wedge point towards the south, which is never the case with a triangle pattern.
This reversal pattern has formed at around 52-week lows which further increases the chances of a reversal on account of mean reversion because the more the stock becomes oversold, the better the chances of a strong reversal.
This breakout might be enough for the stock to change the course of its trajectory. However, it might be too early to gauge the trend reversal as it has been quite a firm bear run. Nevertheless, traders can still eye for INR 56 which is a strong hurdle. If Omaxe shares are able to surpass this resistance, then the border trend reversal would likely be confirmed.
Read More: Strong Breakout: F&O Stock Reaches New High in 2023!
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