52 week highs and all time highs strategy

Prakash Inds cmp 199 is showing interesting chart pattern. In the attached weekly line chart pattern,

1. On right side of chart, we have a flag/symmetrical triangle like consolidation marked in blue since Oct 2023.

2. Within above triangle, there is a smaller triangle shown in red color from which a breakout has happened.

3. At much lower levels there is another prolonged triangular consolidation marked in fluoroscent bold green color. It goes to show the importance to keep away while consolidation is going on because this kind of consolidation can keep going on for a long time (it went on from March 2021 to June 2023) , chewing up time and capital as well as mental peace.

4. Key resistance overhead marked is at 244 which happens to be a 6 year high weekly closing price. (note that on bar chart resistance levels will be slightly different from above level).

5. Overall structure is that of a rounding structure.

FUNDAMENTALLY, company has been posting steady numbers with quarterly EPS at or around Rs 5 per share since past 5 quarters. There has been marginal reduction in interest costs in line with reduction in debt on balance sheet.

Promoter holding has gone up from around 41% in Sep 21 to more than 44% as of now. Dolly Khanna and Mukul Agarwal feature in the public shareholders list since past four quarters. (though this should not be construed as an important investment argument)

Company has got approval for Bhaskarpara coal mines and as per their announcement, they will be able to sell coal in open market too in next quarter or two. That can add revenues and profitability besides providing some backward integration.

Company’s capex related to the mines and other capex is in commissioning phase.

NEGATIVES:

Promoter integrity has been questioned in the past. Pledging of shares by promoters.

Cyclical industry vulnerable to economic downturns and global events. Though past 5 quarter results provide some comfort on that aspect.

Disc: Invested based on technical picture and recent fundamental triggers, and cheap valuations. (this is not an investment advice, and anyone contemplating investment should do their own diligence. )