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It seems like the summer season has already started, at least in Delhi with the Union Territory’s temperature beginning to soar above 30 degrees Celsius, even before the end of February. According to IMD, the maximum temperature soared to 33.9 degrees celsius this month, slightly below an all-time high of 34.1 degrees Celsius.
Expecting a red-hot summer season, investors seem to be showing their inclination toward AC/coolers and refrigerators manufacturers. The share price of Johnson Controls-Hitachi Air Conditioning India Ltd (NS:), a popular home appliances manufacturer with a market capitalization of INR 3,424 crores is also witnessing investors’ demand.
Image Description: Daily chart of Johnson Controls-Hitachi Air Conditioning India with RSI at the bottom
Image Source: Investing.com
From a 52-week low of INR 1,050 marked on 27 January 2023, the stock has seen a shift in the demand and supply equation with the former outweighing the latter. As the stock started inching towards upside, its momentum also increased and with a CMP of INR 1,256.25, it’s up over 19% from the lows.
Yesterday, the stock spurt by 5.2% and closed at the highest level in over 4 months and that too on the back of a significant volume expansion. As per the NSE data, the stock clocked a total volume of 297.9K shares which was around 1,250% higher than the back-then 10-day average volume of 22.09K shares.
It is quite a beaten-down counter in this space with a 1-year return of -27.9%, which further makes it a good bet on the long side, considering the risk-to-reward ratio at these lower levels. But more importantly, the stock has also formed a bullish divergence on the daily chart prior to bouncing off the lows which is another big plus for bulls.
As the peak of the summer season approaches, stocks in the AC/cooler manufacturing space might continue to garner investors’ attention. On the upside, there seems to be a very good potential for the stock to scale to a high of INR 1,450 which is a strong resistance level. The stock might take a breather there but from a slightly longer-term perspective, the level of INR 1,680 – INR 1,700 could also come. Investors can also explore stocks in the same sector such as Voltas (NS:), Whirlpool etc.
Read More: Micro-Cap Under Rs 30: Begins Rally with 20% UC!
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