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Gujarat PSU Witnesses Breakout of Consolidation Range; Stock Jumps Over 6.5%!

17 May 20233 mins read by Angel One
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In the captivating landscape of market dynamics, a fascinating development unfolded in the latter part of the previous month. Market participants, driven by a surge of interest, cast their sights upon the Gujarat government-run public sector undertakings. This newfound enthusiasm was sparked by the State’s intriguing announcement of new guidelines about minimum dividend distribution and bonus issues. 

As the news reverberated through the financial realm, a wave of speculation and anticipation swept across the investment community. The prospect of revised regulations governing dividend distribution and bonus issues introduced an element of intrigue, offering a fresh perspective on the investment landscape. 

With market participants eagerly analyzing the implications of these guidelines, the spotlight now shines brightly upon Gujarat’s public sector undertakings. One of the Government of Gujarat Enterprise is hogging the limelight in Wednesday’s session. 

The stock is Gujarat Mineral Development Corporation Ltd (GMDC) one of India’s leading mining and mineral processing companies. The stock jumped over 6.5% on Wednesday. With this strong up-move, the stock has registered a breakout of a five-month-long consolidation range and interestingly, total traded volume so far has exceeded 43.5 lakh shares which is doubled the 30-day average traded volume, highlighting larger participation in the direction of the trend. 

The stock is trading above its key short- and long-term moving averages and on Wednesday, the stock witnessed a bullish crossover as the short-term moving average i.e. 20-DMA has crossed over the long-term moving average of 200-DMA, which bodes well for the stock. Among the oscillators, the daily MACD has rebounded taking support at its nine periods average thus validating positive bias in the stock. The daily 14-period RSI has generated a bullish crossover above its 9-period average and is seen sustaining above its nine periods average thus supporting the positive bias. The trend strength indicator, Average Directional Index (ADX) is at 35.5, which shows the strength. And this ADX is in up-trending mode. The +DI is much above the ADX and -DI. This structure is indicating the bullish strength in the stock.  

Considering the above factors, market participants can keep an eye on this Gujarat-based PSU

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