Breakout Stocks | Fundamental Analysis | CA Rachana Ranade

"So if you see our Nifty Midcap is at a 52 week high. You'll be like, this was the high, right? A this is September 24 high. So if I'm talking about 52 week high, it just hit a fresh 52 week high yesterday and today there was some sort of correction. I'm not sure whether it looks like a bearish engulf or not. Uh not really but hopefully tomorrow's closing doesn't go on I mean farther weak. Uh otherwise nifty midcap is doing way stronger as compared to nifty normal. Okay. Uh so it it it may face a resistance at 22 522 levels. U if it clears it then it goes in the blue sky zone."

"So uh let me just share my screen and of course 3 months data is gone from the screen right now. The latest that you can see is 4th of August, September, October, 4th of November. Again playing safe a little bit. So this was the high that uh Titan saw this is when January 2024. It was retested in September 2024. Okay. So whenever you see that a stock specifically reaches its all-time high tries to go back there and again it is trying uh one more time it actually you know peaked off here itself and then again took a U-turn now what you have to see is just draw a horizontal line joining one two that's how you draw resistance lines and uh support lines right and then what you have to see is whether it has broken out from this level or not okay always remember even if you see a breakout it has to have a good follow through. So don't only focus on breakout candle. Always also focus on the follow-up candle."

"And if you check the quarterly results. Of course, I'm not going to take you to the management commentary and all. It'll take a lot of time. But just primar results. Typically, three points is what I check. If I were to just quickly glance through or rush through the results, I just check two three parameters. Number one, what is the sales growth? Okay. So, from 14,500 to 18,000. So, I mean that's that's a pretty good growth. I think that has to be more than almost than 20% almost. Yes. Plus if you see here here the operating profit margin was 8% and here it is 10%. So, operating profit margin also has gone up on a year-on-year basis. And if you check the net profit net profit has risen a bit more from 704 to 1,120. Oh that should be more than 50% jump isn't it? 700 50% 350 1050. Yes that's a more than 50% jump. But even if I check PBT or a PBT method, it's it's very clearly visible. Uh profit before tax even if I say this is thousand just for simple math even if I say this thousand this is more than ,500 correct. So it's it's a it's a roughly more than 20% jump in top line and more than 50% jump in the bottom line. So happy with such set of numbers. whenever you see that profit is growing at a faster rate as compared to top line that's that's where you feel that ah good good one right"

"See whenever you see that the stock corrects quite a bit. You see a high, a low, a lower high, a lower low, again a lower high, a lower low, a lower high, a way lower low, a lower high, but a higher low. Maybe first early sign of reversal. And then if you see that it has broken out from here, that could signify reversal. Okay? Also, you have to look at the volumes also. See, I can't I can't show you what has happened in the last three months. So what I want you all to do is is just join this. Now it's okay even if you don't join the wick. Join the body of the candle and you should be able to spot out uh this because if you join the wick your answer could be a shade different. I want you all to join the body of the candle and just tell me whether it is a breakout yes or no."

"So, let's quickly check the fundamental analysis also. Let's quickly check what results has Basoft come up with are they good enough or not. So, let me go to the quarters for Basoft. We're going to check September to September. So, if you see here topline growth is flat, absolutely flat. Shade negative from 1,368 to 1,329. Okay. shade negative. What I appreciate is they have cut the costs. I know I mean uh employee cost if they have cut down on that of course I feel bad. Uh but if you see here from 61% to 60%, it's not like a big cut in the employee expenses but overall they have been able to increase their operating profit margin by 4% which is extremely good with sales flat in fact shade negative. uh but they have then gone to the extent I mean they they might have done it strategically but they have been able to control the operating uh I mean the operating costs and that is the reason why you will see that their profits in fact have jumped from 156 to 210"

"Can you see here? This is already where the stock had collapsed 2 and a half%. But look at this huge gap. Okay, this this was like an 8% 8% down move and it just did not recover from here. Okay. And in such cases, ideally if a stock were to recover, it's extremely important that it tries to bounce back right away. But if you see here, the stock kept on sliding. It made a base here. So as a as a technical analyst, first target that you would want so that it comes on your radar. At least to come on your radar, it should be that it should close above this first point. Okay? Till then, I will I will not even look at that stock. Okay? But I would seriously watch it extremely closely add to watch list la whatever depending on person to person but when this gap gets filled that is something what what would interest me because it's a huge gap right 8% it was a gap down uh so in such cases as a technical analyst I always love to see when huge gaps are filled okay so what I want you all to now again cross check is whether whether this gap has been filled. Yes or no? Okay."

"Now if you see quarters uh you'll see here Asian Paint September 2024 to September 2025 8,000 cr was the turnover and now it's 8,500. So barely 5% job. Okay, five a tad more than 5%. Correct. Uh if you check profit before tax from 9, this is where the magic happens again. Profit before tax 959 to 1,392. This is almost 40% jump. So barely 5% jump in so five 5% plus shade jump in top line but almost as as I'm mentioning almost 40% jump in in bottom line and uh maybe you know when when such special results come up uh it is it is going to come up with some movement in the charts uh rounding bottom but RSI 84 overbought zone See of course you have to look at other parameters you can't just say that RA breakout. Very nice. Very nice. You will have to look at how RSI is is uh right now. Is it like overheated or not?"

"This was the high that it touched on September 16th, 2024. Came down again. Tried to retest that. Came down. Retested that came down. And here we saw a good fantastic breakout. Why am I saying that? 7.2% up move in a week. Fantastic uh breakout."

"Now, let me take you to one more stock. Okay. Interesting stock. Again, uh let me uh first put a poll for you all. A stock which which has which has not been in the good books of so many people including me for the last few months. It is Asian Paints. And I want let me see who can tell me what special thing can you see in Asian paints. I'm not putting a poll also because I want first I want you all to check Asian paint chart. Unfortunately I will not be able to show you what is on screen because uh it falls into uh oh I can show something may not be the entire picture but yeah something I can show you. Okay. Um can can you see that some some important level some important level has been breached by Asian paints yesterday and has given a confirmation today. Who can tell me that word? Asian paints. I want everyone to check the chart of Asian paints. Daily time frame is also okay."

"Okay, I I'll show you one. Uh I can see this right away. Pending not done pending okay fantastic but I will just just for the benefit of everyone let me just share this as well this was the high touch one more time one more touch point and now you have to see whether this has broken out or not just just join the highs and see whether it has broken out or not and I want you all to tell me done breakout done or pending Okay."

"And if you see here September 24 to September 25 flat top line in fact shade lower top line. If I see PBT, PBT from 225 crores has gone down to 183 crores. Fundamentals, I mean the quarterly results have not shown strength at all. Maybe that could be the reason why it has not yet broken out and it may, you know, still not get that nice uh push that it it it needs to cut through the breakout."