One angle we haven’t touched much is the liquidity/market-structure piece. In these tiny counters, 30/50/200 DMA and RSI can look “perfect” simply because price gets yo-yoed by circuits and a handful of trades. A few things I’d check before trusting any chart:
- Liquidity: average daily turnover, delivery percentage trend, number of zero-volume days, and impact cost. If the bid-ask is a few percent wide or the depth is a couple of lots, most technicals are noise.
- Surveillance: is it on ASM/GSM or trading under enhanced surveillance? That caps moves, restricts intraday, and alters behavior of indicators. BSE “Notices” + stock page will show this.
- Corporate actions: frequent preferential allotments/warrants, authorized capital changes, name/line-of-business changes, or auditor churn can be bigger drivers than earnings here. Also make sure historical charts are adjusted for splits/bonuses; otherwise DMAs are off.
- Shareholding pattern: quarterly promoter holding/pledges, new HNI names via bulk deals, and any sudden custodian/FPI “parking.” A creeping rise in public HNI holdings alongside low float is a red flag for operator risk.
- Quality of earnings: operating cash flow vs PAT, debtor days and other receivables, related-party transactions, and any qualified auditor opinions. For microcaps, cash conversion matters more than reported EPS.
- Benchmarking: compare rolling drawdowns and 6-12M returns to the BSE SME IPO index and BSE Smallcap. After the smallcap froth and the MF stress-test episode last year, anything massively diverging without commensurate fundamentals is suspect.
Data sources that actually work for these: BSE stock page (price history + announcements), Screener.in (financials, SHP), Trendlyne/ChartInk (basic DMAs/RSI if available), and the BSE bulk/block deal feed. Analyst coverage will be thin; be wary of “initiations” from paid research portals.
If you’re thinking long-term, I’d size it like a venture-style bet (tiny position), assume slippage on both entry and exit, and look for at least 2-3 clean audit cycles, sustained positive OCF, and stability in SHP. Personally, I’d wait to see migration to main board or at least a meaningful uptick in float and governance before relying on technicals.
Does anyone have the last 8 quarters of SHP and auditor notes handy? Also curious if it’s currently in any ASM/GSM stage-that would change how we interpret the recent price/volume.