Media and Entertainment industry has been hot favorite since late 2014 and we have seen all stocks from the segment emerging out as multi-bagger. One of the stock which had initiated rally in sector was Eros international which moved from almost 140-640 in just a years time who was joined by other stocks like PVR and Inox Leisure. At current date PVR is doing the best followed by Inox Leisure and Eros is last because of a strict Sell-off late last year on accounting scandal allegations. But now i am getting a strong feeling of entering Eros again for 3x movement minimum from here. There are few factors which are giving me strong bias on my view. To start with most crucial point, its about accounting fiasco allegation which its US holding company was facing has been put down after respective appointed committee cleared them after investigation. So fundamentally is surely convincing to investors and analysts who has lost hope in management. Few reports even say that corrected practices would be more profitable to indian counterpart in terms of Revenue per user from ErosNow app. Secondly this Calendar year they are entering almost 4 new India regional movie segments which could add some large portion to Gross sales. Concluding fundamentally, they have almost 65 releases this year in 5 different languages which just 2x their sales from last financial year if everything goes as planned
Coming to technicals, I just spotted most dependable reversal pattern on weekly charts i.e., Inverted H&S. Though we have just kissed Neckline this week, but there are all chances of getting a breakout over the same next week. Weekly indicators are oversold and have just turned bullish by having internal crossovers to their respective averages. Thirdly, as marked on bottom of the charts, volumes have been rising in last three weeks supporting upside price movement. Fourthly, as circled we had got a Morning star pattern before 2 weeks and its confirmed with two weeks close above the same. 278 is resistance as marked with red line as it was the levels where most volume in a week while falling had taken place which could mean it could act as a supply zone. So now all factors is suggesting a sure Buy for long term but medium term trade could be taken on Technical breakout next week.
Strategy for medium traders: Buy above 219 with targets 278/349 sl: 172
Sometimes patterns wont be perfect but still its says that “I-M-Perfect”. Though today many technical analyst wont notice circled pattern as perfect evening star pattern but i would say that this COULD be imperfect evening star pattern and could give some points reversal if not as much as a perfect pattern would give from such a peak. If we talk about some factors to support this imperfect pattern, 1) Recent Rally: We have almost got 600 points rally from low in prior 12 sessions so now its time for some correction to this Rally. 2). Overbought on daily: Indicators on daily charts are overbought suggesting some sell-off though weekly indicators are yet not signing any sell-off which means that any correction in next few sessions would be a strong opportunity for medium term traders to go long but traders can trade short. 3) Sector weakness: Few front line sectors having weight-age on index are also showing weakness on charts such as Nifty IT and Nifty FMCG. 4) Economy situation: As rajan said in recent policy that we have fear of short term chances of inflation which may have some sentimental sell-off. So to end, we can expect some profit booking for short term trade but overall trend still remains intake. Support on downside: 8081,7935 while resistance on upside 8265 on closing basis.
Nifty has given a wonderful run over 7772 which was my trigger for buy as i mentioned in my post on 25th May (Bears Sucked out completely) and target of 8265 was given on 26th May (IPL Fever on D-street). Though my target was left by just 3 points on Friday but we should have margin of safety of +/-5 points . After such a movement we must a get a interim profit booking to almost 8100 levels. But those who only trades long and safe trades must hold existing position for my second target of 8450 but it might take some time. But FnO traders and risky traders must pull up your sleeves tomorrow for a fresh shorts. As we all could notice in the attached graph that we have a got a “Red candle” at the top with recent high volumes and a trade below 8209 would trigger a fresh shorts for traders in coming weeks. On the downside targets are 7989/7925 and stop loss on upside is 8270. But remember that we should only go short below 8209. And safe traders should just hold longs for medium term but book partial profits below 8209. So all should trading according to your view. Stay cautious for volatility mood.
After fast and furious five days we have got a bearish reversal pattern after a long time i.e., Bearish engulfing on Nifty. Market have been one way since last week but now it seems we may get some breaks on the rally. Confirmation of bearish engulfing could be only if we trade below todays low tomorrow or day two. Though my second target 8265 still active, but before reaching there we may get some slide to 7950. Indicators on daily charts are overbought so the slide could be as furious as rally and safe traders should avoid shorts and rather raise their trailing stop loss from 7810 to 7950 on longs recommended above 7700. Stock specific movement should remain positive on the D-street and traders must trade stocks rather than indices. As overall outlook is positive on indices, safe traders must not trade against trend and wait for a long entry below or just hold on longs with a trailing sl. On the upside targets remain 8265 and than 8400. Coming two days are crucial as tomorrow our markets would react to GDP 7.9% and on 2nd June we have OPEC Meet. So stay hedged with 7950 PE June.
Today i just felt i was watching highlights of RCB vs GL where Virat and AB De villiers scored incredible 248 in 15 overs as exactly same we scored 300+ points on Nifty in 2 sessions which was just so fascinating. 7700 was surely my support but frankly speaking i also didnt expect such a rapid recovery in just 2 sessions. But coincidentally it has exactly closed near to my mentioned target 8100 yesterday. Though we were just short of 17 odd points to my target but we can say we almost reached there. Last two sessions rally have surely raised chances of profit booking in coming week but medium term traders should use this opportunity as adding some stocks to portfolio for activated target of 8450 as i mentioned yesterday. But two speed breaker targets on the way could be 8100/8265 while stop loss is 200 day average at 7810. So happy trading days ahead but stay hedged with 7700 PE June Nifty.
Its often difficult to find a perfect pattern on stock charts for a trading view but today i just noticed something which is just like getting ‘Double scoop of icecream’ in scorching heat i.e., Double Inverted H&S on same stock and on same time frame but with Higher targets on Tata Chemicals. Though i am late in intimating you guys of ‘light blue inverted H&S’ but still we can trade for its target combined with larger ‘Pink inverted H&S’ which has been confirmed today with volumes. Looking at indicators on daily charts we are in overbought zone bought they have given internal positive crossover giving confidence for achieving atleast inverted H&S target in near term which could be tomorrow if they post good numbers. So trading strategy for short term traders is going long on Tata Chem tomorrow at first trade with tgts of 458/530 and stop loss at 390.
Vacuum cleaner has sucked out all Bears in a day from the Nifty charts. As i mentioned yesterday, 7772 was the hurdle but we opened way above the hurdle and confirmed short term rally with a close above number of resistances. Technically, now the gates have reopened for upside target of 8100 in june expiry but alot would be dependent on OPEC meet and Bank policy which are on 2 June and 7th June respectively. The last two weeks correction could be attributed to extended consolidation wave patterns on daily charts of Nifty. Today we have got close above 200 day average which was around 7810. Two more close above 200 day average and we are all set for medium term target of 8450. Now Supports on downside could be at 7810 and 7690 for next expiry. Overall stay Bullish on stocks and indices for june expiry but with strict stop loss.
Since last few days, there was nothing to write about on Nifty as we were witnessing a Mary-go-round for traders around 200 day average which was flying around 7792-7810 but today finally i have spotted something on daily charts. Nifty opened flat today but closed way above 0 mark leaving a Green candle but the candle has resisted to line (upper red line)connecting recent higher highs which makes it a bearish point. But we cant surely be going short yet on nifty because on downside we have got a support line (marked red too) which was a resistance line of channel which was intact since the life high last year. Indicators are flat on Daily as well as Weekly chart frame and so we cant get any clear way for either bears or bulls out of their position. Coming to candlesticks, there too we are not having any clear pattern for the clue ahead. So what i understand now is that we have entered a “Vacuumed Area” between the two trend lines. Why i termed it as a Vacuumed area? because those traders or analysts who would be following trend line below at 7670 would create a demand zone around the same level and on other side who would be following trend line above at 7772 would create supply zone around that and third category guys like me who would follow both would try to Sell at above trend line and Buy at below trend line. So lets c who wins the battle and Can Nifty get out of this Vacuum Cleaner soon ? Until Nifty closes out side this Vacuum zone we wont take any call on index.
As it is said that patience’s pays off so has my trading view on Spice Jet. On 8th April 2016 in my post (Link:Spice up your profits with Spice Jet) i recommended trading on a ‘inverted H&S’ pattern on Spicejet which was trading around 71 and my target was 80 which has been achieved safely. In almost 40 days we got 12.5% return on simple patterns, so have patience and have faith on simple patterns. Will surely give you more such recommendations as i get noticed. Please find attached graph of the stock which clearly marks out the pattern and target achieved.
It had been nightmare for BTST traders as Nifty opened gap down and didnt gave any chance for BTST players to exit in profits but positional traders shouldn’t worry much. As i said yesterday that we might get a dip today and best buy would be in the range of 7840-7870 and we have closed exactly at the trigger point on upside. Though looking at Daily chart of Nifty, many of novice technical analyst or traders would say that we have got “Evening star” pattern but IT’S NOT! One of the rule for the pattern is a Long red third candle which in this case is green so a reversal on this pattern cannot be a valid one. Secondly, today again we got low exactly at 200 day SMA which is at 7811. Thirdly, if we calculate fibonacci support level of the rally 7772-7940, it comes exactly at 7811 where we pinched a low today. So all the factors except indicators are still showing hopes of upside. Though my ultimate target remains 8055 and stop loss at 7740 but a BTST trade can take call with a tgt of 7970 while stop loss could be 7810 on Nifty spot level. Still stay hedged and take decision as per your risk appetite.
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