GNFC, Deepak Fertilisers can soar up to 35%, hint charts; avoid Chambal

Barring, Chambal Fertilizers & Chemicals, which has shed 19 per cent on YTD basis, most of the other fertilizers stock have logged gains so far in 2022. Deepak Fertilisers has zoomed 148 per cent.

Shares of fertilizer companies were in focus in trades on Thursday after the Union Cabinet approved a subsidy of around Rs 51,875 crore on nutrients, specifically Nitrogen (N), Phosphorus (P), Potash (K) and Sulphur (S) for Phosphatic and Potassic (P&K) for the rabi season. READ MORE

With the sector, shares of Gujarat Narmada Valley Fertilizers and Chemicals and Gujarat State Fertilizers & Chemicals gained 1.6 per cent each, while National Fertilizers and Chambal Fertilizers & Chemicals moved 0.50 per cent higher, respectively.
 

However, Coromandel International and Deepak Fertilisers & Petrochemicals both traded sluggish, and were down over 1 per cent each.

So far this year, Deepak Fertilisers & Petrochemicals Corp has been the top performer within the sector, with the stock price more than doubling, rising 148 per cent, followed by Gujarat Narmada Valley Fertilizers and Chemicals, and Coromandel International, up 69 per cent and 40 per cent respectively. 

Barring, Chambal Fertilizers & Chemicals, which has shed 19 per cent on YTD (year to date) basis, most of the other fertilizers stocks have logged gains so far in 2022. 

Going ahead, here's a technical outlook on fertilizer stocks:-

Gujarat Narmada Valley Fertilizers and Chemicals Ltd (GNFC) 

Likely target: Rs 850

Upside potential:  20%

Gujarat Narmada Valley Fertilizers and Chemicals shares have not breached the 200-day moving average (DMA), post crossing it in the latter half of 2020. Even during the recent drawdown in June this year, when the domestic indices tumbled 18 per cent, the stock firmly held ground over the key support. 

The 200-DMA currently positioned at Rs 646 continues to cushion the positive bias, with the medium-term outlook pointing at Rs 850 level. There is a mild hurdle at Rs 780 level, which seems can get surpassed without much hustle, shows the daily chart. CLICK HERE FOR THE CHART

Coromandel International Limited (COROMAMDEL) 

Outlook: Weak structure on charts

While the stock is up 40 per cent on YTD basis, the present daily chart formation signals a negative bias. The “Lower High, Lower Low” pattern has tainted the optimistic outlook, pushing the stock price in a downward spiral. Only on a sustained trade above Rs 1,000 mark, the counter could see some respite. At the moment, the price action displays weakness, and if the price breaches Rs 950-level, there could be further slippage. The next support on chart is at Rs 900 level. CLICK HERE FOR THE CHART

National Fertilizers Ltd (NFL)

Outlook: Underneath trend has a support of Rs 46

The stock succeeded in building the support base at Rs 46 in an attempt to cross the barrier of Rs 54 level, shows the daily chart. Possibility of surpassing this hurdle seems robust, as the momentum oscillator, the Moving Average Convergence Divergence (MACD) managed to leap over the zero line, suggesting a positive sentiment. The chart structure looks unwavering and may even see aggravated surge provided the volume assists in the process, as they have begun to gain ground. CLICK HERE FOR THE CHART

Chambal Fertilizers & Chemicals Limited (CHAMBLFERT)

Outlook: Stock looks bearish   

Whenever a stock fails to cross the 200-day moving average (DMA), especially when broader indices trade in a bullish sentiment, the market participates consider such stock to be a poor investment. The same is true for the Chambal Fertilizers & Chemicals shares. The 200-DMA is at Rs 364 and unless this mark is crossed, the trend shall see a negative bias. There is an  immediate hurdle at Rs 335 level. The support area is placed at Rs 300 and Rs 280 levels.  CLICK HERE FOR THE CHART

Deepak Fertilisers & Petrochemicals Corp. Ltd (DEEPAKFERT) 

Likely target: Rs 1,100 and Rs 1,250

Upside potential: 22% to 35%

The stock has repeated the same chart breakout it experienced in July this year, where the stock rose 40 per cent post that. As long as the lower cushion of Rs 830 is defended, the bullish momentum can help the upward trend to resume. The medium-term outlook sees the stock price surging to Rs 1,100 and Rs 1,250 levels. CLICK HERE FOR THE CHART