Is Voltamp Transformers a momentum buy? Find out here

Voltamp Transformers Limited is engaged in the manufacturing of electrical transformers and equipment. It is a smallcap company with a market cap of Rs 2,948 crore. The company has reported higher than industry average growth over the last five years while its market share has also increased to 2.35% from 1% over the same period. This certainly shows that the management is committed to capturing market share at a brisk pace, which is appreciated by the market participants and testimony of this is the strong up-move witnessed in the stock price.

The stock has performed exceptionally well by delivering returns of 62.24% YTD. On a YoY basis, the stock has jumped 80.77% and it has also gained 39.49% in a 3-months’ time frame. This shows that the stock is performing strongly not only for the longer term but also for a short duration and at the same time it is seen outperforming the Nifty500 index. The company recently announced its quarterly results which were good and the company management expects better performance in times to come.

The stock was into the consolidation phase in the last few months before rallying in November. Good volume has been recorded in the past few trading sessions and the stock has gone on to touch fresh all-time highs and has taken out its all-time high. It is in an extreme bullish mood as all the key moving averages are trending up and the stock price is above the key moving averages. The RSI at 77 suggests the strong momentum of the stock. The positive directional movement (+DMI) crossed the -DMI a few days back and currently it is well above it. This shows strong strength and true potential in the stock.

Considering the performance Voltamp Transformers has shown, we can expect the stock to continue its momentum on the higher side. The stock looks technically strong as traders can expect some good returns for the short term.