Delta Corp shares vault over 11% on BSE; 5 experts say watch out these key levels

Delta Corp shares vaulted over 17 per cent in the morning trade on BSE on Wednesday, June 19, a day after the stock fell 3 per cent on profit booking. Delta Corp shares opened at ₹136.05 apiece against its previous close of ₹132.15 and surged as much as 17.3 per cent to the level of ₹154.95. The stock finally closed 11.31 per cent higher at ₹147.10 apiece on the BSE on Wednesday, June 19. Equity benchmark Sensex closed 0.05 per cent up at 77,337.59.

Delta Corp shares have been on a roll this month. Considering the current market price of ₹147.10, the stock has gained nearly 30 per cent in June so far. This follows a nearly 7 per cent fall in the month of May, and a nearly 11 per cent gain in the month of April.

However, looking at the broader one-year timeframe, the stock has declined by nearly 41 per cent.

After strong underperformance, the stock is witnessing some buying interest.

The recent spurt in the stock price could also be attributed to the buzz that Finance Minister Nirmala Sitharaman may announce a reduction in GST in the upcoming Budget, enhancing its profitability.

"There is a strong market buzz that Finance Minister Nirmala Sitharaman may announce a reduction in GST in the upcoming Budget. This speculation has led the market to anticipate additional income in the company's balance sheet in the upcoming quarterly results," Avinash Gorakshkar, Head of Research at Profitmart Securities, told Mint.

"The stock is also available at a significant discount due to prolonged sell-off pressure. Suppose the Union Finance Minister in the Modi 3.0 government indeed announces a GST reduction in her budget speech. In that case, we can expect a surge in buying of Delta Corp shares post-budget presentation," Gorakshkar said.

What are the key levels to watch?

Experts point out that the stock trades above the key moving average, exhibiting bullish momentum. However, the stock has resistance around ₹155-160.

We spoke to five experts to gather their views on what the technical indicators suggest about the stock and which key levels to watch out for. Here's what they said:

Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers

After reaching a peak near the ₹260 mark on June 28, 2023, Delta Corp stock experienced a significant downturn, plummeting by approximately 154 points, or about 60 per cent. However, in the past two weeks, resilience has been shown by stabilising and avoiding further declines.

"The stock has formed a bullish divergence on the weekly Relative Strength Index (RSI) and has broken through a bearish trendline, as observed in the chart. These technical indicators suggest a potentially favourable situation for traders. As a result, it is recommended for traders to consider purchasing Delta Corp shares within the range of ₹140-150. The anticipated upside target is ₹175, with a stop loss set at ₹130, based on the daily closing price," said Patel.

Osho Krishan, Senior Research Analyst, Technical & Derivatives at Angel One

Krishan observed that the stock was in a corrective phase, but it has seen strong volume in the last four days. With today's move, it has surpassed the 200-day simple moving average (SMA).

Krishan underscored that it has happened after a very long time. Today is the first time since last July that the stock has emerged from the 200-day SMA. On July 12, 2023, the stock fell below the 200-day SMA level. From a technical point of view, this is a very positive thing.

"On the higher end, resistance is somewhere around ₹160, which is the bearish gap on the daily timeframe. From here, one can expect an upside towards the ₹155-160-odd zone. But there is definitely strong resistance near ₹160 due to two key things: the previous swing high followed by a gap on the daily timeframe chart," said Krishan.

"Short-term traders can take long positions but wait for some correction because the risk-reward won't be favourable. Buy for the short term in the range of ₹140-145. For short-term traders, ₹160 is the immediate target. On the lower end, support has shifted to ₹130-135," Krishan said.

Ruchit Jain, Lead Research, 5paisa.com

The stock has gone through a long phase of underperformance, but the price-volume action has changed recently as the stock has rallied from its swing low of ₹105 with good volumes.

"It has also broken the moving average hurdles of ₹127 which would now be seen as support on any declines. Traders with existing positions can hold with a stop loss below ₹127 for potential targets around ₹164 and ₹173," said Jain.

Deven Mehata, an equity research analyst at Choice Broking

Delta Corp shares are trading near ₹150 level, demonstrating a robust performance following a significant breakout above the ₹140 level with high trading volumes. The stock is trading above its short-term (20-day), medium-term (50-day), and long-term (200-day) EMA levels, indicating bullish momentum.

"On the downside, ₹140 is a strong support, providing a safety net for the stock. On the upside, minor resistance is observed at around ₹155 level. Should the stock successfully surpass this resistance, it is poised for a further upward move towards the next resistance level at ₹175 and beyond," said Mehata.

"Investors holding the stock from lower levels should consider booking partial profits at the current levels. Additionally, maintaining a trailing stop loss near ₹140 is prudent to safeguard against potential downside while allowing room for further gains. This balanced approach ensures profit-taking while retaining the potential for additional upside," said Mehata.

Milan Vaishnav, CMT, MSTA, the founder and technical analyst of Gemstone Equity Research and ChartWizard FZE

Delta Corp is seen reversing its downtrend and is in the process of confirming a trend reversal. The recent move has seen the stock surpassing all key moving averages.

"Investors waiting on the sidelines to enter this stock can do so at current levels even if the stock sees some corrective retracement. Those who are already invested in this stock at higher levels may continue to stay invested, as higher levels cannot be ruled out," said Vaishnav.

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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.