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Traders interested in the penny stock space should keep a tab on Diligent Media Corporation Ltd (NS:). The company is engaged in the business of printing, publishing and distributing newspapers, magazines, books, etc., and has a market capitalization of a mere INR 35 crore.
Despite being so small, it is a profitable organization and reported a net profit of INR 23.95 crore in FY22 and INR 160.69 crore in FY23. The recent profit figure is 359% higher than the total market cap of the company.
Image Description: Daily chart of Diligent Media Corporation with volume bars at the bottom
Image Source: Investing.com
But here’s the surprising part, even FIIs hold a stake of 4.52% in the company which is almost unbelievable as these astute investors generally do not go this low in terms of market cap while investing.
On the technical front, the stock jumped 9.8% to INR 3.35 on Friday and surged past the resistance of a symmetrical triangle pattern on the daily time frame. This is a volatility contraction pattern and a breakout from it indicates a trend beginning in that direction.
Volumes have always been an issue with such small companies and so is the case with Diligent Media Corporation shares. However, we witnessed some pickup in volume on Friday with a total figure of 323.5K shares which was 208% higher than the 10-day average volume of 104.8K shares.
To estimate the target of the rally, the height of the triangle is calculated which is then added to the breakout level. In this case, it is coming out to be around INR 4.2, which is a good 25% upside from the CMP. A stop loss can be maintained below the lower trendline support of the triangle to cut the losses in case the stock takes a U-turn.
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Read More: How to Check the Quality of Your Stock: Intrinsic Value
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