Recent Price Movement and Volatility
On 16 December, NGL Fine Chem’s stock price demonstrated considerable volatility, trading within a wide intraday range of Rs 136.3. The stock opened with a gap down of 2.58%, hitting an intraday low of Rs 1,308.7 early in the session. However, it recovered strongly to touch a high of Rs 1,445, marking a 7.57% gain by the close. This rebound was accompanied by an intraday volatility of 8.74%, indicating active trading and price fluctuations throughout the day.
Despite the strong price recovery, the weighted average price suggests that a larger volume of shares traded closer to the day’s low, signalling some selling pressure during the session. Nevertheless, the stock’s ability to close near its high reflects resilient buying interest towards the end of trading.
Technical Indicators and Moving Averages
Technically, NGL Fine Chem is trading above its key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This positioning typically indicates a positive short- to medium-term trend, which may have contributed to the stock’s recent gains. The consecutive two-day rise, delivering a 10.01% return over this period, further underscores the emerging bullish momentum.
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Comparative Performance Against Benchmarks
While the stock has shown a strong weekly gain of 11.67%, it has underperformed the broader Sensex over longer periods. Year-to-date, NGL Fine Chem is down 19.72%, contrasting with the Sensex’s 8.37% rise. Over one year, the stock has declined by 24.92%, whereas the Sensex gained 3.59%. Even over three and five years, the stock’s returns lag behind the benchmark, with a 3-year loss of 11.31% compared to Sensex’s 38.05% gain, and a 5-year gain of 25.88% versus Sensex’s 81.46%.
This disparity highlights that despite the recent rally, NGL Fine Chem faces structural challenges or sector-specific headwinds that have weighed on its longer-term performance.
Investor Participation and Liquidity
Investor participation appears to be waning, as evidenced by a sharp 60.39% decline in delivery volume on 15 December compared to the five-day average. This drop suggests that fewer investors are holding shares for the long term, potentially indicating cautious sentiment or profit booking after recent gains. However, liquidity remains adequate, with the stock’s traded value supporting reasonable trade sizes, which facilitates continued active trading.
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Summary and Outlook
In summary, NGL Fine Chem’s 7.57% rise on 16 December reflects a short-term recovery amid volatile trading conditions. The stock’s ability to outperform its sector by 8.1% today and maintain levels above key moving averages suggests renewed buying interest. However, the broader context of subdued year-to-date and one-year returns, coupled with declining delivery volumes, indicates that investors remain cautious about the stock’s medium- to long-term prospects.
Market participants should weigh the recent technical strength against the stock’s historical underperformance relative to the Sensex and monitor whether the current momentum can be sustained amid fluctuating investor participation.
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