Trending Stock: Montecarlo Fashion hits the upper circuit; more momentum to follow?

In the past three months, it has jumped a whopping 75.79%.

Monte Carlo Fashions Limited is an apparel retailer. The company offers a wide range of fashion apparel and garments. It is a smallcap company with a market cap of Rs 1,159 crore. It holds strong fundamentals as it recorded higher than industry average revenue growth and average net income over the last five years. The company successfully managed to increase its market share during the same period. Market has also factored in such good business practices, and it is evident from their stock price.

The stock gained a massive return of 142% on a YTD basis, meanwhile, in the past three months, it has jumped a whopping 75.79%. This shows that the stock has performed well in the medium term. Such price movement is only possible with the help of institutional buying. Promoters hold about 73% of the company portion. The DIIs and the FIIs have increased their stake in the last three months which aided the rally in the stock. Retail portion holds about 25% of the company’s stake.

The stock soared 10% on Thursday as it hits the upper circuit amid strong buying. It is currently trading near its 52-week high. Above-average volumes have been recorded for the past few days which suggests active market participation. Today, the stock has witnessed an open=low scenario which suggests strong buying from the moment the stock had opened.

The stock trades well above all the key moving averages and RSI is going strong at 70. The positive directional movement indicator (DMI) is well above the negative directional movement indicator and shows no signs of slippage. It is not the first time that Montecarlo has hit the upper circuit in recent days. The fact that it is trading near its recent high and any closing above it with strong volume will rally the stock even further. It is advisable to keep a close watch on this stock and make use of the momentum.