Valiant Organics Ltd (BO 🙂 is an equity I have tweeted about several times. This is because I believe that stocks have the potential to be an exceptional generator of wealth. In fact, I expect the future price performance of this share to be somewhat similar to that of IndiaMART InterMESH Ltd (BO :). I say this like when I wrote about Indiamart on Investing.com it was trading at Rs 2,500 and now it is trading at Rs 8,800. Moreover, this price hike has happened in one year about.
The fundamentals of Valiant:
While taking a look at the fundamentals of Valiant Organic, the company appears to be doing well across the board. This is because the ROE stood at 23%, which is well above the industry average of 16%. In addition, the management of the company seems to organize its affairs well, as it actively reinvests in the company. This, in turn, supported the annual revenue growth rate to 9%. If the company continues to improve its metrics in this way, then things seem to be getting better and better for equity.
Another reason fundamentalists should love Valiant is the way the company does business. I say this because the administration has taken an approach where it searches for niches of opportunity in the chemical space where the likelihood of growth is immense, while the competition is lighter. In turn, this has helped the company take hold of lines of business that have much higher operating margins.
Past technical perspectives:
Most people who have read my previous articles know that I give much more importance to the technical and quantitative aspects than to the fundamentals. That’s because there are a lot of fundamentally sound companies out there that are pure price performance duds, one example being ITC (NS :), which I covered earlier. That’s because until the techniques get started, the fundamentals are as useful as toilet paper to an active investor.
The first time I tweeted about Valiant was on March 30, 2021, as my quantitative levels indicated a high probability of a price reversal. This is because the stock was down sharply after the IPO and I thought the trigger traders were out now.
The reversal happened in the next trading session and the stock has so far returned 40% since then. It’s like it was trading at Rs 1,145 and is currently trading at Rs 1,608. Now the question is where can the stock go next?
Equity on the daily chart is currently within a resistance range between Rs. 1,625 and Rs. 1,670. If rejected in this area, the support range to watch for an upward rebound is between Rs 1,450 and Rs 1,500. If it breaks the current resistance zone, the next hurdle on the daily chart is at Rs. 1,830. These levels apply to short term swing traders.
However, for those who play the game longer term with Valiant Organics like I am. The quantum resistance level to watch is Rs 2,048. Once that is crossed, the next quantum resistance is at Rs 2,230 and Rs 2,550.
In conclusion, equity on the daily chart may be at a temporary crossroads due to the resistance range. However, however we think of it, equity has great potential in the long run. Finally, as equity breaks through each of my quantitative levels, I will write another post on Valiant or tweet my opinion on the stock at this point.
Disclaimer: The investments mentioned by Sandeep Singh Ahluwalia may not be suitable for all investors. Thus, you should rely on your analysis and judgment before making any investment decisions. The report provided is for informational purposes only and should not be construed as a proposal to buy or sell securities.