Shares of Shree Renuka Sugar (NSE: RENUKA) went from ₹43 to ₹50 in last 2 weeks gaining by over 17%. The sugar stock broke from its falling parallel channel pattern on 2nd of Feb and risen by almost 7%.
Renuka Sugar is one of the top sugar producing company in India which sells its sugar under the brand name ‘Madhur’.
From last one year, due to seasonal tendency of sugar stocks like NSE:RENUKA, the sector was in continuous downtrend. From its all time high of Rs. 68.75, it fell by almost 42% to Rs. 39.40. On closely analyzing the trend, trend of RENUKA Sugar changed after March 2023.
The stock started making higher high, and gave a breakout of important level of Rs 49 with good volume on September 4 2023. Later, the stock went into phase of consolidation which lasted for nearly 4 months till 2nd of feb 2024.
Why shares of NSE: RENUKA are Rising?
When we look at the price chart of Shree Renuka Sugars, we can see the formation of a symmetrical triangle pattern.
Look at the image above. Upon analysing the technical chart for Shree Renuka Sugars Ltd., we identify an upward trend line forming from year 2021. This sloping trendline establishes a strong support level, showing us a good demand every time the stock hits Rs 40.
The resistance level marked by the downward trend line was formed from a high marked in the year 2021. Renuka Sugars faced immediate resistance around the 51-52 price range within a smaller descending channel.
The share finally breached this channel, on the 2nd of Feb and now since the last 3 trading sessions, it has gained over 10%. While it’s trading near the Sloping resistance level of Rs 50, as the resistance has already been tested multiple times in past, it is most likely to break it this time.
If this resistance level breaks, shares of NSE: RENUKA can see a further continuation in up move.
Will the up move in Sugar Stocks continue?
Recently, the Finance minister presented interim budget which did not have any points regarding sugar stocks like Renuka sugars. But, as the interim budget is only valid for a limited time, the upcoming Union Budget might have opportunities for the sweet sugar sector.
As the government is focusing towards more economical fuel options, ethanol blending is brought into practice. As the government decided to increase the percentage of ethanol blend in petrol, the demand for this spirit is increasing. Ethanol, a byproduct from sugar production, helps these sugar companies increase their revenue.
Another by product from sugar production is bagasse which is used as organic fertiliser. This waste product is also used in the paper industry and as fuel.
As more sustainable ways get adopted, this waste product will also see rising demand, bringing more revenue for companies like RENUKA Sugar. This will lead to an increase in the share price of sugar stocks.
Short Term Swing trading Forecast for Renuka Sugar
| Forecast | Target Price (₹) |
|---|---|
| Forecast 1 | ₹57.40 |
| Forecast 2 | ₹63 |
| Forecast 3 | ₹68.55 |
| Forecast 4 | ₹76.50 |
| Forecast 5 | ₹86.60 |
Long Term Swing trading Forecast for Renuka Sugar
| Forecast | Target Price (₹) |
|---|---|
| Forecast 1 | ₹99.45 |
| Forecast 2 | ₹106.15 |
| Forecast 3 | ₹115.80 |
| Forecast 4 | ₹133.85 |
| Forecast 5 | ₹146 |