Why is National Plastic falling/rising?

Recent Price Performance and Market Context

National Plastic’s recent price action stands out notably against the broader market benchmarks. Over the past week, the stock has surged by 11.69%, vastly outperforming the Sensex’s modest 0.79% gain during the same period. This trend extends over the last month, where the stock appreciated by 20.19%, compared to the Sensex’s 0.95% rise. Despite these short-term gains, the stock remains down year-to-date by 23.72%, contrasting with the Sensex’s 9.08% increase, and has declined 18.30% over the last year while the benchmark advanced 10.47%. However, the longer-term perspective reveals a remarkable outperformance, with National Plastic delivering a staggering 271.80% return over three years and an extraordinary 1002.29% over five years, dwarfing the Sensex’s respective 39.39% and 94.23% gains.

Technical Indicators and Trading Activity

On 21-Nov, the stock opened with a gap up of 3.04%, signalling strong buying interest from the outset. It reached an intraday high of ₹312.50, marking a 4.99% increase on the day. Importantly, National Plastic is trading above all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, which is a bullish technical signal indicating sustained upward momentum. This alignment of moving averages often attracts momentum traders and institutional investors, reinforcing the positive price trend.

Investor participation has also been on the rise, with delivery volumes on 20 Nov reaching 5,620 shares, a substantial 143.89% increase compared to the five-day average delivery volume. This surge in delivery volume suggests that more investors are holding shares rather than engaging in intraday trading, reflecting confidence in the stock’s prospects. The liquidity of the stock remains adequate, supporting sizeable trade volumes without significant price disruption.

Sector Outperformance and Consecutive Gains

National Plastic outperformed its sector by 6.6% on the day, underscoring its relative strength within the industry. The stock has been on a three-day winning streak, accumulating a 15.74% return during this period. Such consecutive gains often reflect positive sentiment among investors, possibly driven by favourable developments or renewed confidence in the company’s fundamentals, although specific news catalysts are not detailed in the available data.

Volume and Price Dynamics

While the weighted average price indicates that more volume was traded closer to the day’s low price, the overall price movement remained positive. This could suggest some profit-taking or cautious trading near the highs, but it has not deterred the stock’s upward trajectory. The combination of rising delivery volumes and trading above key moving averages points to a healthy demand-supply balance supporting the price rise.

Conclusion: Why National Plastic Is Rising

The rise in National Plastic Technologies Ltd’s share price on 21-Nov can be attributed to a confluence of factors. The stock’s strong short-term performance relative to the Sensex and its sector, combined with technical strength evidenced by trading above all major moving averages, has attracted investor interest. The significant increase in delivery volumes indicates growing conviction among shareholders, while the three-day consecutive gains reinforce positive momentum. Although the stock remains down on a year-to-date and one-year basis, its exceptional long-term returns highlight its potential as a growth stock. These elements collectively explain the stock’s 4.99% rise on the day and its sustained upward trend in recent sessions.

Get 2 full years of MojoOne Premium for only Rs. 12,999. Subscribe for 1 year and we'll add another year FREE. Offer valid for a limited time. Start Saving Now →