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.
Equity charts are representations of trade price of a particular stock and Trade price are arrived after psychological decision of a investor. So in short a psychology of investor can be seen on the charts and its always very much difficult to come out a depression! One of the best example of such psychology was seen on MotherSon Sumi Systems chart were after Volkswagen scandal stock saw some strong sell-off and investors, traders and even speculators were avoiding this counter which was the sign of complete “Depression”. But finally after some consolidation now it seems investors are getting back some confidence on the stocks and even Sales in Europe and America are picking up which gives some future valuations on stock a upbeat and weekly charts have also shown a strong reversal pattern to support a view for a rally. As marked by white dashed line we have got a Inverted H&S on the weekly chart with a Neckline at 270 which has been breached and confirmed by a close last week. On the upside we are getting vertical target of 337 which is equal to the distance from the head to neckline. Though their aint any specific rule for stop loss but in this case i would prefer stop loss as right shoulder which is approx 240. I am sure someone would question that we need one more confirmation close for the pattern but looking at the indicators which have given crossover confirmation , i would surely recommend to take a risk bit early. So medium term traders just follow levels mentioned in the post while long term investors just accumulate upto 325!
Spice jet had been one of the best performer in aviation sector last year with almost 6x returns but the rally was not carried forward to new calendar year and we saw 50% profit booking to that rally in first three months itself. In recent weeks stock was resisting near to 100 day average which was around 68 but since last 3 days we have got close above the same giving us a short term confirmation for the upside. Most importantly while resisting near to 100 day average for 3 times prior gave birth to bullish reversal pattern “Inverted Head and Shoulder” as marked in the graph. Neckline of the pattern is at 67.20 which out to act as stop loss for our trade.
Even cyclically, this is the most promising quarter of each year for airlines. To support my view lets look at the Load factor graph below which says that Months from March-June have always seen passenger traffic growing and Airlines operating at optimum capacity
So Strategy on Stock is
Buy Positional with tgt of 80 and SL: 67.20
Rd disclaimer on luvkushfinserve.com before trading!!
Havells has been in strong consolidation zone of 260-310 since almost a year so but during this phase “inverted Head & Shoulder” pattern has emerged on weekly charts. Generally, target is calculated from the neckline which in our case is at 309. So approximately target is arrived at 390 as the distance from low on the had to neckline is 80 which is added to neckline. Fundamentally too, next quarter is considered to be best in terms of sales due to summer. Indicators on weekly charts too have confirmed positive crossover on RSI and MACD. So just buy the stock in portfolio for a quarter or two.
In recent years, Steel sector and especially Tata Steel has been cursed by investor as it has under performed against Nifty index in the rally to 9119. All the long term investors and new investors have started liquidating TataSteel in the current rally but i feel somewhere you guys are making mistake. Surely, stock has been disappointing your portfolio but it has some global reasons rather than just comparing it with domestic Index or giving it domestic reasons.
Let me explain you with the comparative charts between crucial indices and Tata Steel.
Definition of Lines
Tata Steel: Its the closing price of Tata Steel traded on NSE
Steel Index: Its the Weighted Market capitalization index of publicly traded steel companies on NYSE
HRC1: Hot Rod still prices
Nifty: Its closing prices of Nifty 50 Index
To get complete overview of the stock, we have considered last 7 years of comparative study
2009-2012: During this 3 years we could notice that all indices were performing according to one another and Tata Steel was outperforming Nifty throughout the rally. During this time frame steel demand was increasing around the globe and China had just started investing in capacity expansion in early 2009-10. Post 2008 financial crisis it was believed that world economy is stable and back rising with confidence and so all the commodities were back in demand, especially in developing countries in Asia like India and Korea. But PIGS country financial trouble in Euro Zone got some goose bumps in post 2008 financial crisis recovery.
2012-2015: This were the most volatile years in recent times for Equity markets around the globe, starting with PIGS country crisis to China’s slowing economy for the first time in a decade. China by 2013 had expanded its Steel producing capacity which it had triggered in 2009-2012. But it was the bad time to achieve that. Euro zone crisis had completed dried up steel demand in Euro and Chinese slowing market had squeezed steel demand in the domestic market too. So it was completely a mess for commodities around the world and we saw prices falling for commodities to almost 10 years low because of a rare combination of Higher Capacity and Decreasing Demand which had triggered the fall around the globe. But for global Equity Markets this period was Capital Infusion years. As Euro and chinese markets were facing crisis and to some extent US too, their central banks infused alot money in markets which inflated all equity indices without any strong fundamental Back up. This led to divergence, as noticed in the graph, between tata steel and Nifty index as rally was purely backed by financial segment and not by commodity markets. All investors, including me were convinced of the rally but experienced analysts around the globe had already spotted this bubble in 2014. This Bubble busted in March last year and Equity markets so a strong profit booking of almost 25% from the pick in just less than 11 months.
Late 2015-2016: Last two months in 2015 had acted as bottoming out in commodity sector. Excess capacity in steel in China and Europe has started filling the pinch and countries have targeted to cut steel production of almost 200 mln tonne by 2017 which has started reaping fruits in steel prices in early 2016. Steel prices and many other base metals have seen strong recovery from a decades low prices. Even many countries have started imposing Anti-dumping duties for chinese steel which has been also a factor for steel prices rising around the world. Even chinese companies have cut down utilization of capacity to 69% from the pick of 89%.
So we could clearly notice that tata steel is more concerned and trades compared to global steel prices and steel companies world wide as it had Corus in its portfolio. Now all the factors are suggesting strong pull back in commodity markets and that has surely started showing some confidence back in Tata Steel stock in recent weeks. Now the divergence between Nifty and Tata Steel as marked with arrow has to narrow as it was back in 2009-12 but over a period of time. So if each card plays well for tata steel, then it is surely a multi-beggar for long term investors from current price of 315 but holding period should be minimum 3 years. I strongly recommend to start buying tata steel on dips from next possible trading session and have patience for ripening fruits!!!
This view is purely my view and you all should react to it after analyzing it thoroughly and consulting your own financial advisor. Hope this post was useful to you guys!!
Century Textile has given a strong move on the Technical pattern breakout of ‘Double Bottom’ which was recommended to you guys for trading on 4th march as “Century Textile Positional Trade” .Stock has triggered 529.50 level today which is within the target range given in the previous post against than market price of 465. Stock has given sweet return of almost 13% in 20 days which is outperforming Nifty index. Currently stock is resisting near to 100 day average which is around 530 so i would like short term traders to book profit on my trading recommendations. For long term investors now we could see consolidation between 485-530 and its the best time for accumulation. Though you must checkout fundamentals for sure! Anyways, we will trade again once we get some technical pattern again! Enjoy profits this long weekend!
Century textile has been a strong contender for traders choice in volatility. Stock is today showing strength to give a double bottom breakout signs. Currently stock is trading exactly at Neckline around 465 and risky positional traders should take some risk at CMP. Indicators on daily chart are also showing signs of short covering from the oversold zone. So all the factors are supporting that this breakout should be confirmed and we shouldnt miss the bus. We will face a short term resistance around 100 Day Average around 530. So keeping that in mind we should trade.
Buy Century Text with tgt of 525-530. SL: 450
Stock had been traders pick while markets were rallying to 9000 a year back but since than it has under performed Nifty and so it has been out of radar in watch list. But i guess many of them missed a crucial pattern at the recent bottom. Though i picked it up! Strong reversal pattern “Inverse Head and Shoulder” has formed and given a confirmation by closing twice on Neckline. Still its better late than Never. Stock has just crossed a small speed breaker of 50 day at 225 and now next resistance is at 100 day EMA which is at 251 coinciding with Inverse H&S pattern. You guys still could trade.
Target on Upside: 251
Stop loss: 210
We try to implement many technical studies and indicators to get some great multiplexer for long term, but a simple trend line could give you the same too. Today i want to show you graph of Bata India and interestingly you guys could notice that stock has been taking strong support on the white line drawn connecting lows on the chart. You would be glad to know that the graph is Monthly chart and Bata is taking support of this line since 2008. Stock has almost taken support and bounced back for 3 times prior and for almost more than 10 months to count candles. So now today stock is trading at the same upward sloping line and it has been taking support since November. To add other simple tool to trend line, we are getting higher highs and Highers lows, since last 3 months on same time frame. So going out with a common Stop loss idea, we should keep a SL of 3% below the line at 448 and which means sl comes at 434. So a long term investor who believes “Bhav Bhagwan che” can take a long call for 3 years at CMP 468