Venus Pipes: A Breakout Story in the Making

8 Jul

VENUSPIPES : A Breakout Story in the Making

Price Action Analysis:
• Price consolidated between 1,200-1,600 levels from January 2025 to June 2025
• Recent breakout above 1,600 resistance with strong volume confirmation
• Currently trading at 1,574.80 after hitting a high of 2,450.35
• Pullback to retest the breakout level suggests healthy consolidation

Volume Spread Analysis:
• Significant volume spike during the recent breakout phase
• Volume increased from an average of 149.65K to 860.5K, indicating institutional interest
• Higher volume during up moves compared to down moves shows buying pressure
• Volume pattern supports the breakout thesis with strong participation

Key Technical Levels:

Support Levels:
• Primary Support: 1,200 (previous base level)
• Secondary Support: 1,400 (mid-range support)
• Immediate Support: 1,500 (recent pullback low)

Resistance Levels:
• Immediate Resistance: 1,650 (recent high)
• Major Resistance: 2,450 (lifetime high)
• Psychological Resistance: 2,000 and 2,500

Base Formation:
• Strong base formed between 1,200-1,400 levels over 6 months
• Multiple retests of support levels showing accumulation
• Base provides a strong foundation for upward movement

Technical Patterns:

Primary Pattern:
• Bullish continuation pattern with horizontal resistance at 1,600 and rising support line
• Pattern duration: 8 months (Jan 2025 to July 2025)
• Breakout confirmed with volume expansion

Secondary Patterns:
• Higher low pattern indicating underlying strength
• Volume-price divergence resolved with a recent breakout

Trade Setup:

Entry Strategy:
• Conservative Entry: On pullback to 1,500-1,520 levels
• Aggressive Entry: Current levels around 1,570-1,580
• Breakout Entry: Above 1,650 with volume confirmation

Exit Strategy:
• Target 1: 1,800 (immediate target)
• Target 2: 2,100 (50% retracement of lifetime high)
• Target 3: 2,400-2,500 (lifetime high retest)

Stop-Loss Levels:
• For entries around 1,570: Stop at 1,450 (below base support)
• For entries around 1,500: Stop at 1,350 (below key support)
• Trailing stop: 8-10% below recent swing highs

Risk Management:

Position Sizing:
• Risk per trade: Maximum 2% of portfolio
• Position size calculation: Portfolio value × 2% ÷ (Entry price - Stop loss)
• Gradual position building is recommended, given the volatility

Risk Assessment:
• Risk-Reward Ratio: 1:2 to 1:3 for current setup
• Time horizon: 3-6 months for primary targets
• Market correlation: Monitor broader market sentiment

Sectoral Backdrop:

Steel Pipes and Tubes Industry:
• Infrastructure spending boost under government initiatives
• Demand from the oil and gas sector supports growth
• Housing sector recovery driving construction demand
• Water supply projects creating additional opportunities

Industry Trends:
• Consolidation phase in the sector, favouring established players
• Raw material cost pressures being managed through pricing power
• Export opportunities emerging in neighbouring markets
• Technology upgrades improving operational efficiency

Fundamental Backdrop:

Company Overview:
• Venus Pipes & Tubes is a leading manufacturer of steel pipes and tubes
• Established presence in water supply, structural, and industrial applications
• Strong distribution network across India
• Focus on quality and customer service

Recent Developments:
• Capacity expansion plans to meet growing demand
• Strategic partnerships with infrastructure companies
• Improved working capital management
• Strong order book visibility for coming quarters

Financial Health:
• Steady revenue growth trajectory
• Improving margin profile
• Healthy balance sheet with manageable debt levels
• Strong cash flow generation capabilities

My Take:

Short-term View (1-3 months):
• Consolidation expected around current levels
• Potential for retest of breakout levels
• Volume patterns to be monitored for direction

Medium-term View (3-6 months):
• Upside potential to 2,000-2,200 levels
• Sector rotation could benefit the stock
• Infrastructure spending cycle supporting fundamentals

Long-term View (6-12 months):
• Structural growth story intact
• Market leadership position strengthening
• Potential for significant value creation

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.

9 Jul

Dagangan aktif

Aggressive Entry: Current levels around 1,570-1,580 (Active)