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After opening on a weak note, the broader markets recovered well by the end of the session, with the index closing with a 0.16% uptick at 19,465. The small-cap space also participated in the rally and one stock from this pocket that has come on investors’ radar is Sastasundar Ventures Ltd (NS:).
It is a lesser-known company that provides digital platforms in the pharma space and has a market capitalization of INR 928 crore. The company’s portfolio includes Flipkart Health+, Retailer Shakti, and GENU Path Labs.
Image Description: Daily chart of Sastasundar Ventures with volume bars at the bottom
Image Source: Investing.com
Although it is a very small company, the stock seems to be preparing for a big rally. Today, on the back of strength in the pharma space, the stock jumped 6.15% to INR 308.8, totaling around 13.7% rally for the week so far. The high momentum in this counter is backed by a wave of investors who are trying to get their hands on the shares of Sastasundar Ventures.
Today’s volume on the NSE was recorded at 137.4K shares which might seem less, but it is 165% higher than the 10-day average volume of 51.7K shares. Some of you might think that the rally has already been missed as the stock is up over 13% this week, however, if you zoom out the daily chart a bit, the bigger picture is telling a different story.
There is some resistance around INR 315, which is from where the previous short-term rally was finished in mid-June 2023. This makes this level a crucial one to watch out for and if the stock crosses this hurdle this time, the rally will likely extend all the way to the next level of INR 380. That’s a good upside potential of 20% from there.
One of the reasons for such a high potential target is the lack of selling zones above the hurdle. Also, as the liquidity is low in this counter, that also acts as a catalyst for the price to move sharply as a dearth of sellers is always there in low-volume stocks.
Above the resistance of INR 315, traders can maintain a stop loss below INR 280 to manage the risk in case the stock takes a U-turn.
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