RattanIndia: Next New-Age Multi-Bagger Play ? Chart of the Week

15 Jun

Why RTNINDIA Could Be Your Next Multi-Bagger Play, let's analyse my "Chart of the Week" Idea.

Price Action:
• Multiple base formations visible across the timeline from 2021-2025
• Classic cup and handle pattern formation during the 2023-2024 consolidation phase
• Rectangle consolidation pattern between ₹35-40 levels during Early 2025
• Strong breakout from multi-year resistance around the ₹75-80 zone
• Current pullback to retest breakout levels around the ₹47-50 range

Key Supports and Resistance Levels:
• Primary Support: ₹47-50 (previous resistance turned support)
• Secondary Support: ₹35-40 (rectangle pattern base)
• Major Support: ₹25-30 (long-term base level)
• Immediate Resistance: ₹65-70 (previous consolidation zone)
• Major Resistance: ₹75-80 (breakout level)
• Target Resistance: ₹94-95 (measured move projection)

Base Analysis:
• Stage 1 Base: ₹10-25 range from 2021-2022 (Accumulation phase)
• Stage 2 Base: ₹35-45 range during 2023-2024 (Re-accumulation)
• Current Base: ₹47-50 retest zone (Healthy pullback after breakout)

Volume Spread Analysis:

Volume Characteristics:
• Massive volume spike during recent breakout (300+ million shares)
• Above-average volume during consolidation phases
• Volume expansion on upward price movements
• Volume contraction during pullback phases indicates a healthy correction
• Volume profile shows strong institutional participation

Volume Patterns:
• Accumulation is visible during base formation periods
• Distribution avoided during recent highs
• Current pullback on lower volume suggests buying interest at support

Trade Setup:

Entry Strategy:
• Primary Entry: ₹48-50 (current support retest)
• Secondary Entry: ₹52-55 (breakout reconfirmation)
• Aggressive Entry: ₹45-47 (deeper pullback opportunity)

Exit Levels:
• Target 1: ₹65-70 (38% upside from ₹50)
• Target 2: ₹80-85 (65% upside from ₹50)
• Target 3: ₹95-100 (90% upside from ₹50)

Stop Loss Levels:
• Conservative: ₹42-43 (below rectangle support)
• Moderate: ₹45-46 (below recent lows)
• Tight: ₹47-48 (below immediate support)

Risk Management:

Position Sizing:
• Risk 1-2% of portfolio capital per trade
• Use a 2-3% position size for a conservative approach
• Maximum 5% allocation for aggressive traders

Risk-Reward Ratios:
• Entry at ₹50 with ₹45 stop: Risk-Reward of 1:3 to 1:9
• Entry at ₹52 with ₹47 stop: Risk-Reward of 1:2.6 to 1:8.6

Portfolio Allocation:
• Small-cap allocation: 10-15% maximum
• Individual stock limit: 2-5% of total portfolio
• Sector diversification recommended

Sectoral and Fundamental Backdrop:

Business Overview:
• RTNINDIA comprises of tech-focused new age businesses, including e-commerce, electric vehicles, and drones
• The company is completely focused on providing world-class electric mobility products that are affordable and accessible to every Indian
• Multi-business model spanning fintech, e-commerce, and drone technology

Sector Dynamics:
• The electric vehicle sector is experiencing government policy support
• The e-commerce segment is benefiting from the Digital India initiatives
• Drone technology is gaining traction in commercial applications
• Tech-focused businesses aligned with India's digital transformation

Financial Highlights:
• Market cap of RattanIndia Enterprises Ltd stood at Rs. 8,263 Cr
• RattanIndia Enterprises Ltd's net Sales rose by 22% since the same period last year to ₹ 6,866 Cr in the FY2025
• The company is in a growth investment phase with expanding business verticals.

Investment Thesis:
• Diversified exposure to high-growth sectors
• Potential beneficiary of India's transition to electric mobility
• Strong technical setup after multi-year base formation
• Early-stage company with significant scaling potential ahead

Risk Factors:

Technical Risks:
• Small-cap volatility and liquidity concerns
• Dependence on broader market sentiment
• Potential for gap-down moves in adverse conditions

Fundamental Risks:
• Current losses and cash burn in the growth phase
• Execution risk across multiple business verticals
• Competition in the electric vehicle and e-commerce segments
• Regulatory changes affecting drone and fintech operations

My Take:
This technical setup presents a compelling opportunity with the stock breaking out of a well-defined pattern, supported by decent enough fundamentals in the Growth Sectors of New Age Company and favourable sector dynamics. The risk-reward profile appears attractive for traders and investors willing to manage position size appropriately.

Keep in the Watchlist.
NO RECO. For Buy/Sell.

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Disclaimer: "I am not a SEBI REGISTERED RESEARCH ANALYST AND INVESTMENT ADVISER."
This analysis is intended solely for informational and educational purposes and should not be interpreted as financial advice. It is advisable to consult a qualified financial advisor or conduct thorough research before making investment decisions.

30 Jun

Dagangan aktif

Secondary Entry: ₹52-55 (breakout reconfirmation) Active.