Dixon tech was a big winner in the post Corona rally. Stock price went up from levels of around 600 to 6000 plus, a 10 X within a time period of 1.5 years or so. In the process its PE went up from 35-40 to a high of 180 at one point of time. (screener data). And even closer to the tops, a lot of analysts and investors were gung ho citing huge opportunity size in the segment the company operates in. i.e manufacturing of outsourced electronics and household products. But then trees cannot grow to the sky. Stratospheric valuations can sustain only as long as numbers last. Narratives can take a stock price only so far before reality catches up.
The chart has now formed a head and shoulders breakdown. Downside targets are quite alarming. While the targets may or may not get achieved, those wanting to buy should be greedy for price and or time correction. (disc: no positions)
