Dhampur, Dwarikesh: Breakout in sugar stocks has room for more upside

Shares of sugar companies continued their northward journey at the bourses on Tuesday, with Bajaj Hindusthan rallying 10 per cent while Dhampur Sugar Mills and Dalmia Bharat Sugar rose 8 per cent, each.

Among other individual stocks, Dwarikesh Sugar Industries, Avadh Sugar & Energy, Uttam Sugar Mills, Triveni Engineering & Industries, EID Parry, Shree Renuka Sugars, and Balrampur Chini Mills were up in the range of 2-5 per cent. In comparison, the S&P BSE Sensex traded 0.9 per cent lower at 49,057, at 1:52 PM.

Most brokerages have a positive stance on India’s sugar industry as it appears well poised to benefit from global and domestic factors. Lower output from countries like Brazil, Thailand and EU nations would keep supplies tight and global prices firm, enabling India to increase exports. On the domestic front, favourable policies, rising ethanol demand (blending target of 20 per cent by CY25, from 8 per cent currently), and aggressive ethanol capacity addition would likely drive earnings. READ MORE

Here's how some sugar stocks look from technical viewpoint

Balrampur Chini Mills (BALRAMCHIN)

Likely target: Rs 355 - Rs 365 (after crossing Rs 340)

Upside potential: 4.41% - 7.35%

With a “Higher high, Higher Low” formation, the counter is set to climb new levels. The current momentum indicates the next breakout above a firm close of Rs 340 levels. When that happens, the upside rally may venture into the uncharted territory of Rs 355 and Rs 365 levels, as per the daily chart. The Relative Strength Index (RSI) has not seen aggressive selling pressure in the overbought category indicating that the strength actively supports the bullish sentiment. The immediate support comes at Rs 320 and Rs 302 levels. CLICK HERE FOR THE CHART
 
Dwarikesh Sugar Industries Limited (DWARKESH)
 
Likely target: Rs 66 and Rs 72

Upside potential: 14.78% - 25.22%

A “Double Bottom” formation reflects a firm bullish outlook for this counter, as per the monthly chart. The trend is moving towards Rs 66 and Rs 72 in terms of medium-term perspective. The closing basis support stays Rs 50 mark. The Monthly Moving Average Convergence Divergence (MACD) has decisively crossed the zero line upward, suggesting a positive direction for the upcoming sessions. CLICK HERE FOR THE CHART
 
Triveni Engineering & Industries Limited (TRIVENI)

Likely target: Rs 180

Upside potential: 15%

The counter has managed to absorb the selling pressure near Rs 150 levels. This breakout indicates a rally towards Rs 180 mark. The support comes at Rs 135 levels, as per the daily chart. The overall trend is bullish in the overbought territory of RSI, which is not witnessing any major breakdown in the stock price. CLICK HERE FOR THE CHART
 
The Andhra Sugars Limited (ANDHRSUGAR)

Likely target: Rs 480 -  Rs 500 (only after a close above Rs 460 level)

Upside potential: 4.35% - 8.70%

The next breakout for the Andhra Sugar is over an active close of Rs 460 level. When that happens, the counter may see a rally towards Rs 480 and Rs 500 level, as per the daily chart. The RSI is well placed in the overbought category suggestive of the positive bias. The volumes stricture has been supportive on the bullish outlook with market participants taking keen interest on a green close. CLICK HERE FOR THE CHART
 
Dhampur Sugar Mills Limited (DHAMPURSUG)

Likely target: Rs 370-  Rs 385

Upside potential: 10.45% - 14.93%

After crossing the major resistance of Rs 300 mark, the counter surpassed the all-time high of Rs 530.50 levels. This move has opened doors for the next rally towards Rs 370 and Rs 385 levels, as per the daily chart. The immediate support comes at Rs 300 and Rs 280 levels. The RSI is witnessing buying momentum in the overbought territory, indicating selling pressure is subsiding on the bullish outlook. CLICK HERE FOR THE CHART