The chemical industry, after experiencing a prolonged slump lasting five months, is now beginning to show signs of recovery. As market conditions improve and prices start to stabilize, certain stocks are emerging as promising options for both traders and investors. Notably, HEG and Graphite India are exhibiting reversal patterns that could pave the way for a significant turnaround.
HEG: Signs of a Bullish Rebound
HEG has faced a steep decline, plummeting 46% from its peak of ₹620 in December 2024, bottoming out at ₹330. However, the stock’s recent bounce from this critical support level indicates a renewed interest from buyers, hinting at a possible trend reversal.
Key Indicators for HEG’s Recovery:
- Double-Bottom Breakout: The emergence of a double-bottom pattern reinforces bullish sentiment.
- 50-Day SMA Crossover: HEG has surged above its 50-day Simple Moving Average for the first time since January 2025, signaling a potential shift in trend.
- Volume Surge: An increase in both price and volume confirms strong market participation, validating the upward momentum.
- Strengthening RSI: The 14-period Relative Strength Index (RSI) exceeding 60 suggests a bullish divergence, indicating additional upside potential.
Future Outlook for HEG
In 2024, HEG achieved an impressive return of 100%, although it has recently entered a correction phase, dropping from ₹620 to ₹330 over three months. Early indicators of recovery are now surfacing, as the stock has formed a bullish double-bottom pattern and surpassed the 50-day SMA with increasing volume—key signals of accumulation before a potential upward move.
Graphite India: A Potential Reversal in the Works
Graphite India has struggled throughout 2024, yielding a disappointing 48% return. Nevertheless, the stock is showing early signs of a turnaround, with bullish indicators emerging on its daily chart.
Key Technical Signs for Graphite India:
- Inverted Head and Shoulders Breakout: This classic bullish reversal pattern signifies a potential trend change.
- Volume Surge: The combination of rising price and volume suggests significant accumulation, confirming the breakout.
- Gaining RSI Strength: The 14-period RSI is now above 50, indicating an improved momentum and the potential for further gains.
Future Outlook for Graphite India
The past year has been challenging for Graphite India, with the stock correcting from ₹710 to ₹370. However, the latest technical signals hint at a potential shift in momentum. The formation of a bullish reversal head and shoulders pattern serves as a classic accumulation signal, and the strengthening 14-period RSI suggests increasing bullish momentum.
Final Thoughts
With strong reversal indicators emerging, HEG and Graphite India are demonstrating early signs of a potential comeback. Their bullish chart patterns, rising RSI, and key technical breakouts signal that momentum is building. Although market volatility remains a concern, these stocks could offer enticing upside opportunities.
Monitoring crucial resistance levels and confirmation signals will be vital, as the next significant move could be just around the corner.
Important Disclaimer
This article aims to share insightful charts and data points, but it is not a recommendation for investment. It’s advisable to consult with a financial advisor before considering any investment. The contents are for educational purposes only.
Disclosure
The author and their dependents do not possess any stocks mentioned in this article, while clients of Jainam Broking Limited may or may not hold these securities. Always conduct your own research or consult an advisor to make informed investment decisions based on your specific objectives and resources.
