Tata Chem, Alkyl Amines: These chemical stocks may rally another 25%

With the Tata Chemicals' stock continuously witnessing buying momentum in the overbought condition of Relative Strength Index (RSI), the strength remains intact

Improved business sentiment amid low Covid-19 cases, favourable government policies, and a huge export opportunity are acting as the much-needed impetus for the Indian specialty chemicals industry, believe analysts who expect the industry to grow at a healthy double-digit rate over the medium term.

“We expect the industry to grow on a compound annual rate of 12 per cent and reach $65 billion by FY25, from the current $32 billion,” says Mitesh Shah, research analyst at ICICI Securities. 

Chemical companies catering for personal care, pharma and agrochemicals have witnessed strong growth, led by a faster-than-expected pick-up in demand. Moreover, demand from automobile, construction, and textile firms is also catching up, as the economy recovers from the Covid-19 pandemic. READ ABOUT IT HERE

On a year-to-date (YTD) basis, stocks of firms like Paushak, Balaji Amines, Deepak Nitrite, and Tata Chemicals have soared between 56 per cent and 95 per cent at the bourses, as against a 4 per cenr rise in the benchmark S&P BSE Sensex. Despite this, there is room for upside in specialty chemicals stocks, analysts believe.

Here is how some of these stocks look on charts:

Tata Chemicals Ltd (TATACHEM): This stock is hitting all-time highs levels regularly supported by heavy volumes. The overall trend is now indicating a rally towards Rs 850 and Rs 910 levels. With the stock continuously witnessing buying momentum in the overbought condition of Relative Strength Index (RSI), the strength remains intact. The immediate support stays at Rs 710 levels, as per the daily chart. CLICK HERE FOR THE CHART

Balaji Amines Limited (BALAMINES): The recent rally in the stock has resulted in a breakout above the resistance of Rs 1,760 levels. A strong closing above this threshold has also initiated a fresh rally towards the Rs 1,920 and Rs 2,000 levels. The overall trend shall remain bullish till the stock stays above the support zone of Rs 1,600. The immediate closing basis support comes at Rs 1,800 levels. CLICK HERE FOR THE CHART

Alkyl Amines Chemicals Limited (ALKYLAMINE): This chemical stock may see the next leg of rally only when it surpasses the resistance of Rs 5,600 mark. The current formation suggests a sideways movement in the range of Rs 5,500 to Rs 4,900 levels. That said, the overall trend is bullish with a support of 50-days moving average (DMA), placed at 4,800 levels, as per the daily chart. CLICK HERE FOR THE CHART

Navin Fluorine International Limited (NAVINFLUOR): A decisive close above Rs 2,800 level may initiate a fresh upside rally in the stock. Once that happens, the stock may see enter an uncharted territory of Rs 3,000 levels. The Moving Average Convergence Divergence (MACD) has crossed the zero line upward, suggesting further upside in the stock. The closing basis support comes at Rs 2,700 levels. CLICK HERE FOR THE CHART

Gujarat Fluorochemicals Ltd (FLUOROCHEM): The stock has given a trendline breakout around Rs 580 mark and is witnessing follow-up buying, as per the daily chart. As long as the stock defends the support of Rs 590 levels, the upside bias may remain intact and may even push the stock towards Rs 640 and Rs 660 level. One can see RSI crossing the resistance of 52 value, suggesting underlying strength in the stock. CLICK HERE FOR THE CHART