Micro-cap swing trading opportunity: This steel stock's pattern target indicates a robust 20 per cent up-move; high ROE, and notable clients Tata Steel and SAIL- Add to your watchlist!

India's leading manufacturer and exporter of Cored Wires and Aluminium Flipping Coils, primarily used in the metallurgical industry

Indian benchmark indices faced selling pressure on Thursday, leading the NSE benchmark Nifty 50 index to slip below the 21,300 mark. The majority of sectoral indices were observed trading in the red, with Nifty IT and Nifty Pharma down by 1.67 per cent and 1.14 per cent, respectively. Buying interest, however, was noted in the Realty and Energy sectors.

A mixed trend was evident in the broader market indices, with Nifty Mid-Cap down by 0.50 per cent, while Small-Cap showed an increase of 0.15 per cent. Notably, one micro-cap stock defying the bearish trend on Thursday is Sarthak Metals Ltd, witnessing a remarkable increase of nearly 12 per cent. With this robust up-move, the stock has recorded a resolute breakout from a 24-week-long consolidation, with a depth of nearly 28 per cent. The breakout is supported by strong volumes, twice the 30-day average, indicating significant participation in the direction of the trend. The total volume traded is the highest since January 2024.

The daily 14-periods RSI has generated a buy signal, moving above its nine-period average, validating a positive bias. Similarly, the daily MACD has produced a bullish crossover, further confirming the positive bias.

Sarthak Metals Ltd, a part of the Desraj Bansal Group, is India's leading manufacturer and exporter of Cored Wires and Aluminium Flipping Coils, primarily used in the metallurgical industry. As an experienced and quality-conscious manufacturer, Sarthak is the preferred supplier for these products to some of India’s largest steel units. The company's primary product categories include Cored Wires and Aluminium Flipping Coils, with an additional production line for Cored Wire Feeder Machines.

The company boasts marquee clients such as Tata Steel, Jindal Steel & Power, Mukand, SAIL, Usha Martin. With an ROE of 33 per cent and a PE ratio of 16.5x, the stock has witnessed a substantial 30 per cent jump in the last three months.

Traders are advised to closely monitor this stock for potential swing trading opportunities, given its current presentation of an opportunity for a 20 per cent plus upside from the current levels