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Texmo Pipes & Products Is On The Verge Of Reversing Its Long-Term Trend

15 May 20232 mins read by Angel One
It is now trading just below the neckline (Rs 68 level) of trend reversal price pattern “Inverted Head and shoulder” drawn from the highs of July 2022 to April 2023.
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Nifty is trading around day’s high after the strong recovery from day’s low. Capital Goods sector outperformed the benchmark index from the last few trading sessions. Today also one stock grabbed investors’ attention by rallying more than 8% from the same sector.

The stock is Texmo Pipes & Products Ltd, and the company manufactures PVC and HDPE pipes which includes suction and delivery hose pipe, rigid PVC pipes, elastomeric sealing ring fit PVC pipe, PVC casing and ribbed screen casing pipes, SWR Pipe, plumbing pipe, conduit pipes, casing strips, column pipe, HDPE plain pipe, sprinkler pipe, PLB HDPE cable duct and drip irrigation system and fittings of all kinds. Headquartered at Burhanpur (Madhya Pradesh), it has branch offices in Maharashtra, Madhya Pradesh, Rajasthan, Gujarat, Andhra Pradesh, Delhi and Chhattisgarh. Its manufacturing facility at Burhanpur (Madhya Pradesh) has a capacity of 2500 tonnes per annum.

Technically on the weekly chart, it is a proven multibagger stock which rallied from almost Rs 8 to Rs 100 in the period of March 2020 to January 2022. The stock retraced this multibagger rally up to golden Fibonacci ratio 61.8% in March 2023. From this support level it rallied from Rs 42.05 to the current level Rs 63 which is more than 50%. It is now trading just below the neckline (Rs 68 level) of trend reversal price pattern “Inverted Head and shoulder” drawn from the highs of July 2022 to April 2023. Weekly closing above this neckline will confirm this breakout.

On the daily chart, the stock is in consolidation range of Rs 68.5 and Rs 57 from April 26, 2023, by making lower highs and lower lows. It retraced 38% of its previous rally and made a low of Rs 57 which is also its 200-DMA support. From this retracement and key moving average support level, it rallied almost 9% and today’s candle engulfed the last 11 days consolidated fall showing aggressiveness of buyers.

One can expect follow-up buying after the breakout and long-term investors and momentum traders looking for opportunity in the capital goods sector can track this stock closely.

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