Chembond Chemicals Breakout

29 Nov 2022

1. Buy or Sell at your own risk
2. Don't risk more than 1%-2% of your capital as stop loss
3. Position Size formula:- Stop Loss Amount/(Buy Price-Initial Stop Loss Price)
4. Sell on RSI close below 30 (or use any other method of your liking)
5. Some other ways to sell stocks can be
a. 25% or 50% up in three weeks or less
b. Weekly tailing tops with high volume
c. Exhaustion gaps
d. Heavy daily volume without further upside
e. Largest one day price drop

After a consolidation since October 2021, CHEMBOND has given a breakout today. Buy with a stop just below ₹238. (One can use the low of the previous bar/supertrend indicator/previous support point/fixed percentage from the buy price as stop loss also)

Strengths: -
1. Quarterly sales growth is at 31% and quarterly profit growth is at 62%

2. Debt to equity at 0.02 (less than 1 is good), Interest Coverage at 25.2 (greater than 3 is good), Current Ratio at 3.13 (greater than 1.5 is good)

3. Debtor days have decreased from 111 to 94

4. Promoter holding has increased by 1.21% over the last quarter

5. Company has been maintaining a healthy dividend payout of 69%

6. Stock is trading at 1.20 times its book value

Weaknesses: -
1. The company has delivered a poor sales growth of 3.74% over the past five years

2. Company has a low return on equity of 4.27% over the last 3 years

Disclaimer: I am not SEBI Registered. Do trade or invest at your own risk, I am not responsible for any losses and won't claim anything from your profits either. Take financial advice from your advisors before jumping in.