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The rally in the small and mid-cap spaces continues today as well, despite a lackluster performance of the frontline shares. Another stock from this counter that is buzzing in today’s session is Filatex India Ltd (NS:). The company is in the textile business with a market capitalization of INR 1,692 crore and trades at a TTM P/E ratio of 26.39. Despite its small size, FIIs have a decent stake of 6.04%, as of the June 2023 quarter which was nil a year ago.
Investors would probably be frustrated by now, as the stock hadn’t moved an inch for around 7 months. There were short-term moves that gave opportunities to swing traders but for investors, the rates almost stayed at the same level as they were in February this year.
Image Description: Daily chart of Filatex India with volume bars at the bottom
Image Source: Investing.com
However, today seems to be an inflection point as the stock caught a sudden interest from market participants, which led its price to surge by 8.8% to INR 43.3. The rally helped the stock to soar above an important hurdle of INR 42. This level was a make-or-break for investors as there were more than 6 attempts to break this hurdle since February 2023.
Today’s final break was also supported by a heavy volume of 3.9 million shares, which is a mammoth jump of 1,122% over the 10-day average of 319K shares. Any breakout when accompanied by volume expansion is a reliable one, and a jump of such a magnitude cannot be ignored.
Traders can wait for a closing above INR 42 which will confirm this price and volume breakout on the daily chart. On the upside, the stock can rally to 48.5 from thereon, depicting a decent potential of 12.5% from the CMP. As usual, a retracement towards the breakout level would probably be a better long opportunity. A stop loss can be maintained below INR 38.5 to curb the risk.
Read More: Small-Cap Breaks ATH, Rallies 6% to Unchartered Territory!
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