Renuka, EID Parry: Sugar stocks to sweeten as global prices hit 11 yr-high

Domestic sugar stocks may rally up to 25 per cent after crossing key hurdles

Shares of domestic sugar companies will be in limelight, after US Sugar #11 futures hit 7-year high and London sugar futures crossed the 11-year mark on fear of tighter global supply.

Simbhaoli Sugars was the top gainer, closing over 14 per cent on Wednesday. The majority of sugar companies closed on strong note, surging in the range of 5 per cent to 2 per cent. Balrampur Chini Mills reached a 10th month high on Wednesday.

Historically, in commodity market, whenever international prices make significant moves, the domestic markets tend to follow similar trend. Now, when overseas prices are soaring to major highs, this may trigger favourable rally back home. 

Here’s the technical outlook for domestic sugar stocks amid international prices striking noteworthy peaks:-

Balrampur Chini Mills (BALRAMCHIN)

Likely target: Rs 480 (once Rs 420 is decisively crossed)

Upside potential: 14%

Shares of Balrampur Chini Mills are attempting to engulf all the sell-off emerging near the hurdle of Rs 420. One the stock succeeds to close over this barrier, with robust volumes; the trend could see immediate levels of Rs 480.

The support for the breakout is located at Rs 400, which needs to maintained on a closing basis. Only a breach under Rs 345, where the stock formed a resilient base in the recent time, shall negate the positive bias. CLICK HERE FOR THE CHART

Shree Renuka Sugars Limited (RENUKA)

Likely target: Rs 60 and Rs 65 (after crossing 200-DMA)

Upside potential: 14% to 23%

While the shares of Shree Renuka Sugars crossed the 50-day moving average (DMA) placed at Rs 45.90, with a gap-up close, the real breakout is poised at Rs 52.50-mark, its 200-DMA. The current formation illustrates a positive strength at Rs 45 and Rs 43, which could bolster the up move. 

A break through over the 200-DMA might see this counter headed to Rs 60 and Rs 65, as per the daily chart setup. CLICK HERE FOR THE CHART

E.I.D. Parry (India) Ltd (EIDPARRY)

Likely target: Rs 580 (once Rs 520 is take out)

Upside potential: 11.50%

Once the hurdle of Rs 520 is overcome, which is the trendline hurdle for the E.I.D. Parry (India) share; the breakout could garner a rally towards Rs 580 levels. This formation will then result in a trendline breakout, a technical indication of a shift towards a positive sentiment. 

The present support falls in the range of Rs 490 to Rs 480 levels, as per the daily chart. The weekly chart reveals minor hurdle at Rs 550 level. CLICK HERE FOR THE CHART

Sakthi Sugars Ltd (SAKHTISUG)

Likely target: Rs 30

Upside potential: 25%

After successfully closing over the 200-DMA, the counter accomplished higher strength by taking out Rs 24.90, its 100-DMA barrier. This rise is supported by robust volumes, suggesting that market participants are in favour of the up move. 

The bullish bias is moving in the direction of Rs 30 and the support for the stock exists at Rs 22, right above the 200-DMA. CLICK HERE FOR THE CHART

Dwarikesh Sugar Industries Limited (DWARKESH)

Likely target: Rs 110

Upside potential: 15%

Shares of Dwarikesh Sugar Industries may breakout when the hurdle of Rs 95.50 is taken out, with aggressive volume. The breakout then shall see a rally to Rs 110, which the stock has failed to cross since December last year. A closing basis support of Rs 90 could assist the stock in supporting any correction. 

The Moving Average Convergence Divergence (MACD) has moved over the zero line, reflecting that the positive momentum favouring the upward bias. CLICK HERE FOR THE CHART