By Kiran Jani
The chemical sector, which has been on a downward trend for the past five months is finally showing signs of a recovery. With prices stabilising and the broader market improving, some stocks are showing potential for a turnaround.
HEG and Graphite have formed potential reversal patterns, indicating possible opportunities for traders and investors.
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HEG saw a sharp 46% decline from its December 2024 peak of ₹620, hitting a low of ₹330. However, a decisive rebound from this long-term support level suggests renewed buying interest and a possible trend reversal.
Key indicators supporting HEG’s strength:
- Double-Bottom Breakout – The stock has broken out of a key double-bottom pattern, reinforcing bullish sentiment.
- 50-SMA Crossover – HEG is trading above its 50-day Simple Moving Average (SMA) for the first time since January 2025, signalling a potential trend shift.
- Volume Surge Confirming Breakout – A simultaneous rise in price and volume suggests strong participation, validating the upward momentum.
- Strengthening RSI Momentum – The 14-period Relative Strength Index (RSI) above 60 indicates bullish divergence, pointing to further upside potential.
Source: Investing.com Outlook: HEG Limited
HEG delivered a strong 100% return in 2024, but the stock has been in a correction phase, dropping from ₹620 to ₹330 over the past three months.
Now, early signs of a potential recovery are visible. The stock has formed a bullish double-bottom pattern, and its price has moved above the 50-day SMA with rising volume, a key signal of accumulation before an upward move. These technical indicators suggest that HEG could be potentially setting up for a rebound.
Graphite India – Bullish reversal in play
Graphite India remained under pressure in 2024, delivering a negative 48% return. However, the stock shows early signs of a potential turnaround, with bullish signals emerging on the daily chart.
Key Technical Indicators:
- Inverted Head and Shoulders Breakout – A classic bullish reversal pattern has formed, signalling a possible trend change.
- Volume Surge – Rising price and volume suggest substantial accumulation and confirm a breakout.
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