Paper stocks log historic gains in 2022, will the trend continue in 2023?

West Coast Paper Mills, JK Paper, Tamil Nadu Newsprint & Papers may see up to 25 per cent upside in 2023.

Shares of paper companies logged smart gains in trades on Wednesday in an otherwise rangebound market. 

Among individual stocks, Balkrishna Paper Mills was locked at the 20 per cent upper circuit, while Malu Paper Mills rose 5 per cent. Both these stocks had soared 30 per cent in the preceeding two sessions. 

Shares of JK Paper, West Coast Paper Mills, Seshasayee Paper & Boards were up over a per cent each in intra-day trades. So far this week, these three stocks have advanced in the range of 4 per cent to 8 per cent.

Further, the year 2022 has been one of the best years for paper stocks, with top performers scoring over double-digit gains. Shares of West Coast Paper Mills, JK Paper, Tamil Nadu Newsprint & Papers and Seshasayee Paper & Boards have skyrocketed by 149 per cent, 120 per cent, 117 per cent and 102 per cent, respectively.

Will paper stocks continue to rally in the upcoming year 2023? To understand this, let’s consider the technical outlook:-

JK Paper Limited (JKPAPER) 

Likely target: Rs 500

Upside potential: 12%

Whenever a stock breaks out of the consolidation range, the rally is expected to be robust and resilient. The same is the case with JK Paper shares. The stock has broken upward by dismantling the hurdle of the Rs 400 - Rs 435 consolidation range, suggesting a bullish upside. The stock has recorded a new all-time high today and shows technical certainty to rally further in the direction of Rs 500. The immediate support for the stock is placed at Rs 430 level. CLICK HERE FOR THE CHART

Balkrishna Paper Mills Ltd (BALKRISHNA)

Likely target: Rs 50 and Rs 58

Upside potential: 8% to 25%

Shares of Balkrishna Paper Mills have surpassed the key hurdle of the 200-day moving average (DMA) placed at Rs 38.30-mark and seems headed towards Rs 50 and Rs 58, which are the following barriers. At this juncture, the stock needs to shield the support of Rs 40 on a closing basis. CLICK HERE FOR THE CHART

Tamil Nadu Newsprint & Papers Limited (TNPL)

Likely target: Rs 300 and Rs 335

Upside potential: 12% - 25%

TNPL shares have witnessed a “Golden Cross” breakout on the weekly chart. The stock last broke out of the same pattern in 2014, after which the stock gained over four times in a medium-term period. The current formation indicates a steady upside in the same direction. The nearby support for the stock comes at Rs 240 and Rs 220, with upside momentum pointing at Rs 300 and thereafter at Rs 334. CLICK HERE FOR THE CHART

West Coast Paper Mills Limited (WSTCSTPAPR)

Outlook: Hurdle at Rs 650

Shares of West Coast Paper Mills require to take out the obstacle of Rs 650, with aggressive volumes to see the next leg of the upside. And to do so, firstly the stock needs to surpass the immediate resistance of Rs 610 and Rs 625. The support for the stock comes at Rs 540 level. Once the hurdle of Rs 650 is taken off, the breakout move could see a rally towards Rs 750 level. CLICK HERE FOR THE CHART

Seshasayee Paper and Boards Ltd (SESHAPAPER)

Outlook:  Range bound trade

Shares of Seshasayee Paper and Boards are presently trading in the range of Rs 270 - Rs 310. A breakout on the upside, could trigger a rally of Rs 70 to Rs 90 points. The Relative Strength Index (RSI) is gradually moving over 50 value, suggesting a possible rally taking cognizance of the underlying bullish strength.   CLICK HERE FOR THE CHART