As we navigate through the unpredictable financial landscape of 2025, there appears to be a silver lining emerging, especially within the fertilizer sector. After experiencing notable downturns, stocks like FACT and Paradeep Phosphates are beginning to show signs of a promising recovery. With the monsoon season on the horizon, investors may find lucrative opportunities in these stocks as the demand for fertilizers is set to surge.

Market Volatility and Recovery Signs

The beginning of 2025 has brought significant fluctuations to both global and domestic markets. The India VIX has skyrocketed by 120%, while the S&P VIX has jumped by 140%, resulting in considerable price corrections across various indices. However, there’s a shift in market sentiment as price levels begin to stabilize, paving the way for select sectors to potentially rebound. Fertilizer stocks, in particular, warrant close attention as the monsoon approaches.

FACT: Signs of a Bullish Turn After a Major Drop

FACT has endured a steep decline of 52% since its peak in June 2024, plummeting from ₹1,187 to ₹565. Nevertheless, recent trends indicate a possible turnaround, with the stock showing resilience and a rebound from its lows. This could signal renewed interest from investors, hinting at the onset of a bullish trend.

Key Indicators Suggesting a Reversal for FACT:

• Fibonacci Retracement: The stock has recently found support at the 50% retracement level, a classic indicator of an impending bullish trend.
• Double Bottom Pattern: A bullish reversal pattern is forming, suggesting a possible upward trajectory.
• Volume Analysis: During the price decline, trading volumes remained stable, indicating a potential trend reversal.
• RSI Momentum: The 14-period Relative Strength Index (RSI) has crossed above the neutral mark of 50, hinting at bullish momentum and suggesting further upside potential.

Forecast for FACT

From April 2023 to June 2024, FACT recorded an impressive 494% return. However, after facing a downturn, early recovery signals are appearing. The formation of a bullish double bottom pattern and its position above a critical Fibonacci level, combined with a strengthening RSI, suggest that FACT could be gearing up for an upward movement.

Paradeep Phosphates: Emerging Bullish Signals

Paradeep Phosphates faced a 36% decline from January to March 2025. Recently, though, the stock has shown signs of recovery, and bullish patterns are emerging on the daily charts. This suggests that the stock may be on the verge of resuming its previous upward trend.

Key Indicators Supporting Paradeep Phosphates’ Recovery:

• Rounding Bottom Breakout: The stock has recently broken out of a classic rounding bottom pattern, reinforcing the potential for a continued upward trend.
• Volume Surge: The concurrent rise in both price and volume indicates strong market participation, validating bullish momentum.
• RSI Strength: The 14-period RSI has surged above 60, signaling bullish divergence and further upside potential.

Outlook for Paradeep Phosphates

Having delivered a commendable 169% return from March 2023 to January 2025, Paradeep Phosphates has faced recent pressure, dropping from ₹130 to ₹84. Yet, technical indicators are beginning to show early signs of a recovery. The breakout above a key bullish pattern, combined with increasing volumes and a strengthening RSI, suggests that Paradeep may be well-positioned for a rebound.

Final Thoughts

Both FACT and Paradeep Phosphates exhibit strong technical signals that hint at a potential bullish trend within the fertilizer sector. With the formation of encouraging chart patterns, rising RSI readings, and significant breakouts, the momentum is shifting positively.

As the monsoon season approaches, fertilizer stocks are likely to benefit from increased demand, given their crucial role in agriculture. Coupled with these technical indicators, these stocks present an intriguing opportunity for investors looking to capitalize on both seasonal factors and technical momentum.

Important Disclaimer

This article is intended to provide insights and provoke thought regarding market trends. It is not a recommendation for investment. Always consult with a financial advisor before making any investment decisions. This content is purely educational and should not be considered financial advice.

Author’s Background

With over 15 years of experience in trading and technical analysis within India’s financial markets, the author is a recognized figure in business channels. Currently serving as the Head of the Technical and Derivative Research Desk at Jainam Broking Limited, the author brings extensive knowledge to market evaluations.