When a BSE share yields more than 600% in a year, what should be your current approach
The BSE’s shares finished Tuesday’s trading session up more than 10%, setting a new all-time high of Rs 3,264.70 on April 23, 2024. For the second day in a row, the stock had increased.
Over a variety of time periods, BSE shares have shown favorable returns. The company has returned a respectable 33.11% over the last month, demonstrating both its stability and growth potential. Even more remarkable results over the last six months have been seen, with a significant rise of 72%, suggesting a steady increasing tendency.
BSE shares have increased 40% so far this year, sustaining the stock’s strong performance over the current fiscal year. Taking a larger view, the stock has returned an amazing 600% over the last 12 months, with a 52-week low of Rs 458 set on April 23, 2023 of previous year.
In the future, Parakh advised investors to be cautious and keep a careful eye on the stock’s values in relation to its fundamentals. Strong brand equity and diversification initiatives are encouraging for BSE’s long-term success. Regulating changes and fierce competition from other exchanges, however, may provide difficulties.
Religare Broking’s Rohan Shah, a technical analyst, commented on the technical levels of the BSE stock and said that the market has seen a strong surge after a breakout from the four-month consolidation area. On the other hand, given the emergence of negative divergence in the momentum indicators and the stock’s extreme overboughtness on the lower and medium-degree charts, it is impossible to completely rule out profit-taking or a time-wise correction.
Shah also said that traders should refrain from opening new long positions right now since the risk-reward profile is unfavorable. We believe that traders could think about increasing their long positions around the 2950–2900 zone’s crucial support, which also happens to be the short-term moving average and the zone’s prior resistance. Even if it’s higher, 3150–3200 is still a significant obstacle in the near run.
According to Swastika Investmart’s Senior Technical Analyst Pravesh Gour, this move is in response to the growing demand for Sensex Options, whose average daily turnover has sharply grown. The reinstatement of Bankex and Sensex futures contracts with weekly expirations and smaller lot sizes in May 2023 has also been linked to the rise in the price of BSE’s shares.
By expanding into a variety of areas, including options on futures contracts for basic metals (copper, zinc, and aluminum) and energy (WTI and Brent oil), BSE has strengthened its position in the derivatives industry. Over the course of a year, the company’s sales climbed steadily, and its net profit increased as well,” Gour said.
