Wire stocks rally: Polycab, Finolex gain up to 200% in 18 mths; key levels

Most of the stocks are now seen testing the 20-DMA; trade along this key moving average is likely to dictate the near-term trend for electric wire-related stocks; suggest charts.

Shares of wire and cable manufacturers, like Polycab India, have witnessed a strong bull-run on the stock exchanges in the last 18 months. Polycab India stock has rallied 151 per cent since the start of calendar year 2023.

Among the peers, KEI Industries and Dynamic Cables have surged over 210 per cent each; Finolex Cables has gained 193 per cent, while Precision Wires has jumped 124 per cent in the same comparable period.

Given the buzz in the wire-related stocks; here's a technical outlook on the key industry players.

Polycab India

Current Price: Rs 6,450

Downside Risk: 10.1%

Support: Rs 6,220; Rs 6,155

 

Resistance: Rs 6,605; Rs 6,900

Following the gap-down in late June, Polycab stock is seen struggling to find its feet again. The stock has since been trading below its 20-DMA (Daily Moving Average), which stands at Rs 6,900. In fact, the stock ended below the 50-DMA on Tuesday, the key moving average stands at Rs 6,605. CLICK HERE FOR THE CHART

The near-term bias for the stock is likely to remain tepid as long as the stock remains below these moving averages. On the downside, the stock may slide towards its 100-DMA at Rs 5,800 levels. Interim support for the stock can be expected around Rs 5,950 - its 20-WMA (Weekly Moving Average). That apart, support for the stock exists around Rs 6,220 and Rs 6,155 levels.

Finolex Cables

Current Price: Rs 1,607

Downside Risk: 7.9%

Support: Rs 1,570

Resistance: Rs 1,650; Rs 1,660

At present, Finolex Cables is seen testing support around its 20-DMA at Rs 1,600-mark. Key momentum oscillators seem to be in favour of the bears on the daily scale; hence the stock may eventually break the 20-DMA support. CLICK HERE FOR THE CHART

In which case, the stock can potentially drift towards the lower-end of the Bollinger Bands at Rs 1,530; or test the super trend line support at Rs 1,480. Interim support for the stock can be expected around Rs 1,570 levels.

In case of a pullback, the Finolex Cables stock is expected to face resistance at Rs 1,650 and Rs 1,660 levels. 

KEI Industries

Current Price: Rs 4,605

Bias: Indecisive

Key Pivot: Rs 4,564

For the last three weeks, KEI Industries stock has been treading along its 20-DMA, which now stands at Rs 4,564. The price-to-moving averages action remains favourable for the stock, even as the key momentum oscillators indicate an indecisive trend ahead. 

As long as the stock holds the 20-DMA, it can look to test the higher-end of the Bollinger Bands at Rs 4,800. Break and sustained trade above the same can trigger a fresh rally towards 5,050 levels. CLICK HERE FOR THE CHART

On the flip side, in case, the 20-DMA support fails to hold, the stock can slip to Rs 4,280 levels.

Precision Wires

Current Price: Rs 161.40

Downside Risk: 19.4%

Support: Rs 157, Rs 147

Resistance: Rs 164; Rs 167

At present, Precision Wires stock is seen trading close to its 20-DMA support, which stands at Rs 157. Among the key momentum oscillators - the MACD (Moving Average Convergence-Divergence) has shown a negative crossover on the daily scale. Hence, the stock may face some downward pressure going ahead.

Break and sustained trade below the 20-DMA, can trigger a fall towards the 50-DMA, which stands at Rs 142. Interim support for the stock is at Rs 147. In case of a bounce, the stock is expected to face resistance at Rs 164 and Rs 167. CLICK HERE FOR THE CHART

Dynamic Cables

Current Price: Rs 584

Downside Risk: 9.3%

Support: Rs 557

Resistance: Rs 598; Rs 630

Dynamic Cables stock is trading below its 20-DMA for the third straight trading session. The stock now faces immediate resistance at Rs 598. On the downside, the stock seems headed towards the 50-DMA at Rs 557; failure to hold that support can trigger a slide to Rs 530 levels. CLICK HERE FOR THE CHART

On the upside, resistance for the stock is seen at Rs 630, in case, it climbs above the 20-DMA.