RCF, Chambal Fertilizers, GNFC: Charts suggest upside for fertiliser stocks

Fertiliser sales surged by almost 98 per cent year on year in May 2020, according to government data

The government has touted the agricutural sector as the one which will support the 'rebooting of the economy'. In fact, last month, when the Finance Ministry released the data regarding a select few indicators to assert that the economy was rebounding after seven weeks of lockdown, it included food grain procurement, electricity and fertiliser consumption, among other things.

“With a forecast of a normal monsoon, the agricultural sector should support the rebooting of the economy. Though GDP contribution of the sector may not be very large, its growth has a very positive impact on the large population dependent on agriculture,” the ministry had said.

After facing the lockdown, farmers in Maharashtra started sowing their kharif crop early to take advantage of a fast approaching monsoon. Kharif sowing usually begins here around June 15, nearly a week after the monsoon sets in by around June 10. However, this year farmers prepared their fields in advance for sowing the short duration crop in the hope that good rainfall would yield a good harvest. READ ABOUT IT HERE

Most fertiliser stocks have done well at the bourses over the past few sessions in this backdrop. Is there more steam left? Here's what charts indicate.

Rashtriya Chemicals & Fertilizers Ltd (RCF): After crossing its 200-day moving average (DMA), the counter is indicating chances of a further upside. The immediate resistance comes at Rs 52.20 levels, with the overall trend indicating a rally towards Rs 60. The closing basis support comes at Rs 44 levels. The overall trend suggests positive bias as the 50-DMA has crossed the 100-DMA, suggesting downside is capped at crucial supports. CLICK HERE FOR THE CHART
 
Gujarat Narmada Valley Fertilizers and Chemicals Ltd (GNFC): The range of Rs 165 to Rs 168 has become the resistance range for this counter. This level also coincides with 200-DMA as per the daily chart. On the downside, till the counter trades above the breakout levels of Rs 150, the upside bias should prevail. The Relative Strength Index (RSI) is indicating a resistance at 61 values, suggesting minor weakness. CLICK HERE FOR THE CHART
 
National Fertilizers Ltd (NFL): The weekly chart clearly indicates a breakout of “Inverse Head and Shoulder” with immediate move towards 45 levels. The closing basis support remains at Rs 30 levels. The volume has risen significantly on the breakout, which suggests positive sentiment. The Moving Average Convergence Divergence (MACD) has crossed the zero line upward on the weekly chart, an indication of a possible upward move. CLICK HERE FOR THE CHART
 
Chambal Fertilizers & Chemicals Ltd (CHAMBLFERT): This counter has shown stability above Rs 140 levels, which is at around 200-DMA. A crossing of the previous high of Rs 153 suggests buyers gaining on the upward sentiment. The overall trend is highly bullish with rally likely towards Rs 170 levels. Further, a positive crossover of 50-DMA with 1000-DMA has boosted the counter's positive sentiment. This shows that any downside is likely to be minimal and any corrective moves would witness buying momentum. CLICK HERE FOR THE CHART
 
Deepak Fertilisers & Petrochemicals Corp. Ltd (DEEPAKFERT): A “Golden Cross” has started gaining attention in this counter, as per the daily chart. The recent surge in volumes rising over 40 lakhs indicates buyers taking interest, gradually. The trend is highly bullish with the next upside to emerge above Rs 123 levels. The support remains at Rs 110, with trend suggesting that buying would emerge at corrective moves. CLICK HERE FOR THE CHART