New Delhi: The stock market opened with a fall on Thursday but it showed recovery due to RBI’s policy announcement. RBI has not increased the repo rate after six consecutive hikes. In such bullish sentiments, capital goods sector has seen strong buying activity since last few days. A small-cap stock in this sector saw a gain of about seven per cent this morning. The name of this share is Precision Wires India Limited. It is currently trading at Rs.69 with strong volumes. The company manufactures Enamelled Round, Rectangular Copper Winding Wires, Continuously Transposed Conductors and Paper/Mica/Nomex Insulated Copper Conductors. The compound sales growth of this company was 25% in the last five years. During this period, its ROE was 15%, compounded profit growth was 23% and stock price CAGR was 10%. The company has zero debt and a healthy dividend payout ratio of 32.4%. The stock was earlier showing a short-term downtrend. It has almost touched 200 DMA with 50% fall from the last up move. It has been consolidating in the range of Rs 67.40 to Rs 59.40 since last few weeks. Today it has crossed this consolidation range in the morning session with 7% gain in 20 days above-average volume. Thus it has given a breakout from the trend reversal price pattern on the daily time frame. Its 14-day RSI (61.5) and the short moving average crossover are confirming the short-term trend with strong momentum. Looking at all these factors, it is likely to accelerate in the coming days. Investors looking for better opportunities in capital goods sector can add this stock to their watchlist.
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