Strong Accumulation Signals in Mothersumi suggest the beginning of a Strong Upside Rally!

Dear Reader,

Hello again!

The daily chart of Mothersumi is showing the beginning of  a new uptrend on the daily chart. Signs of accumulation are evident. The image below highlights the same.

Mothersumi on 13.06.19 showing accumulation signs

This is a very basic set-up often observed at the beginning of a strong uptrend. The big cats are buying the stock and hence the swell in volumes.

Mothersumi was an all time favourite of investors until the dawn of Electric vehicles brought its twilight. The stock has corrected almost 60% over the past 18 months from the high of Rs. 260.
Currently, the first resistance lies at level Rs.128. A sustained closing above this level would mean a confirmation of the uptrend trend. Accumulating the stock at this level is an opportunity rarely spotted!

Another positive is my favourite RSI positive divergence at the bottom. It is evident in the above chat (not highlighted) that when the price marked the low of Rs. 113, the RSI did not forge a corresponding low but took a support at the level of 30 indication a positive underlying momentum.
This combination of positive divergence in RSI and accumulation in volume is a pretty sure shot way of identifying stocks in the early stage of an uptrend.

Mothersumi is a great company with a top class management team. Following this article I will continue to share the news updates and subtle changes which reinforce/oppose this bullish view.

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Bottoming out formation in BIRLACORP. CMP-Rs.555, Headed for Rs. 680+

BIRLACORP has bottomed out in the charts. I have been following this stock since Rs. 452. 1) The beautiful RSI positive divergence near the bottom was the first indication of a bottom after RSI went oversold. Usually such signals help identify horses for long term. The last time one such signal turned up was in the charts of Balrampurchini.

2) The formation of higher lows is another indication of an uptrend forming. The stock has moved up almost 10% in the last two trading sessions alone.

3) Another positive factor is that the volume picks up during uptrend in the stock.

4) RSI has also undergone range shift and is oscillating in the range of 70-40 instead of 60-sub 30 levels.

5)Pitching for early target of 680, this stock held the support of 491 very strongly during the correctionary phase before spurting ahead in last two sessions.

REC Ltd follow up- 34% return and counting

Hello Readers:

Since the first post on REC Ltd (HERE) the stock has return over 34%. It touched Rs155 recently. I am sharing below a quick update on the call.

Please share you feedback/queries if any

Email: kchamaria1993@gmail.com

Rec Ltd. Weekly chart. After a strong rally, a temporary correction may now ensue before continuation. 

Nifty 50 Analysis: Drawing a plan of action

Dear Readers,

With the festive season behind us and the elections ahead, the market is in a lull state. Many are talking about 'action' coming back as elections draw closer and given that, it is only prudent to have a plan of action ready.

I have presented the hourly chart of Nifty50 below for analysis, but before we begin I would like to draw your attention to the indicator I have primarily used for this analysis.

Over the past few months, I have figured a new moving average about which you will not have heard anywhere else. This exponential moving average is exceptionally long, but works beautifully on daily and hourly and even shorter time frame charts. The 600 EMA is 3x longer and 3x smoother than our favorite 200 EMA, and if you listen to me, this will soon be your 3x favourite too. You can use the 600EMA label to search my blog for other posts mentioning this magical moving average and deciding the effectiveness of this underrated moving average for yourself. 

Coming to Nifty now. In the chart attached below, the red arrows are clearly marking the resistance which the 600EMA  has posed for Nifty on every rally. The one instance when the 600 EMA was breached was apparently an instance of a fake breakout. The ascending triangle visible on the chart is capped by 600EMA and upward trendline is providing it support. This is a classic ascending triangle. Now this is a continuation pattern. 

The market as I see it now is quite weak. The first support has been touched. A sustained breach of 10770 on closing basis would take the index to 10540 and also mean failure of the pattern which will lay the ground for deeper correction. I am betting on the failure. 

However, if the pattern succeeds, then on the event of a strong upmove above the 10870 level , with a closing on the daily chart , a proper throw back and subsequent continuation should take Nifty up to 11750 again. 

Nifty Hourly chart, captured on 10-01-2019

That is from my side on Nifty. Please do share your outlook on the index and the general direction of the market. I have been bearish since 11700 level. I was bearish at 10600 also and I will continue to be bearish till nifty does not break the 10000 level!

Disclaimer: I am holding a Nifty JAN 10300 Put. 

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Nifty 50: 600EMA poses as major resistance on hourly chart

Hello Readers!

Here is a quick analysis of the hourly chart of Nifty. I'm being honest when I say the short covering rally witnessed in the index in the past three days was nothing less than a shocker. I has been short on Nifty from the 10950 level having spotted the end of Wave B just in time. However (call it complacency) I did not atall look out for a potential support on the chart when the index started falling from 10950 and wiped out nearly 600 points. Having patiently seated out this rally I can see a resistance on the chart. RSI has also has the chance to breath and climb up to the 60 level. The only worrying factor is that RSI crossed the level of 60 yesterday, which is something I was hoping would not happen. 

Irrespective of that I will look at the bigger picture and bet on Nifty going ahead and finishing the Wave C. The chart analysis is attached below.

Please feel free to share your views. You can revert in the comment section of email me kchamaria1993@gmail.com

Nifty50 breaking the floor! Follow up on the successful bear call

Hello Readers!

I previously posted an article  on Nifty50 titled- The Doji is here, and its bear-ly a good news (posted on 30th Nov 2018) wherein I wrote about the reasons why Nifty could turn lower (technical based) and it did!

Therefore, I would like to follow-up on the analysis. 

The below mentioned chart details out the probably support areas, the first one can confidently be said as achieved even before the market opens in the face of the RBI governor's resignation. 

One way the above analysis differs from the previous analysis is the level of the 600EMA. Previously the 600EMA stated a level of around 9754, however it has changed and now stands at 9950. Despite of the support level moving higher we cannot completely discredit the importance of moving averages as important support and resistance zones. 
I would like to go ahead and emphasize that the 600EMA in my opinion is only a potential target level and not the bottom. I strongly believe the correction will go deeper irrespective of the events like election results, President Trump's trade war inflicting policies, OPEC issues getting resolved, currency an interest rate. Interconnected as they all are, the signals of weakness and deep correction have already been given long ago. 

I will not elaborate on this right away. It is better to take one step at a time and go from one level to the next rather than factoring in extreme levels before hand and taking up ill judged positions in the market. 

Few stocks that I have posted about in the past that look good are as follows:

YesBank- https://kavitatechnicalanalyst.blogspot.com/2018/12/yes-bank-giving-strong-technical-signal.html
KPIT- https://kavitatechnicalanalyst.blogspot.com/2018/12/keep-it-moving-kpit-is-set-to-roll.html
Balrampurchini- https://kavitatechnicalanalyst.blogspot.com/2018/11/balramurchini-and-bata-india-stock.html ( I am very eagerly waiting for price to fall to 90 levels so I can reenter) 
Britannia-https://kavitatechnicalanalyst.blogspot.com/2018/10/look-at-britannias-shares-your-evening.html (already run up 15% since the post)

There are a few more names that you will find when you browse through my blog Wishing you luck!

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Yes Bank giving a strong technical signal despite of a weak market!

Hello Readers!

Yes Bank has been victimised enough for its governance issues. The correction that has happened has brought it to levels which make it a very attractive investment. A bottom in sentimentally impacted stocks occurs suddenly and Yes Bank has just signalled a potential bottom at 150. 

Refer to the below attached analysis and chart of Yes Bank. The occurrence of positive divergence in RSI, Rsi taking support on exactly 30 and the morning star pattern are all super positives especially since they overlap.

I believe a long here would be beneficial with a stop of 150 and a target of 280 (till its 600EMA which will be strong resistance to take out)

Yes Bank daily captured on 06/12/2018

This is all for now!

Please feel free to revert with your opinions and feedback!

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Read this analysis on NIFTY50 which stated the correction before it started.

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KeeP IT moving: KPIT is set to roll!

Hello Readers!

Here's a super quick update for you!

With Nifty 50 falling again it only makes sense to look out for defensive stocks. The IT sector is perfect place to look out for such opportunities.

KPIT is presenting a marvelous opportunity for investment. The analysis along with the chart is mentioned below!

Please feel free to reach out to me for additional discussion on the same!

Nifty 50 Analysis: The Doji is here, and its bear-ly a good news

Hello Readers!

Please find the analysis of Nifty in the images below!

Nifty 50 formed a Doji pattern right at the 50% Fibonacci retracement level today. Could this be the end of Wave B?

Note: Wave B catches people in the wrong direction. It performs the task of enticing the suckers to jump into the market. This is where bear or bull traps happen. As a general rule, B Waves tend to show lower volume.

Analysis: I believe Nifty 50 is showing the same traits of “eager participants jumping in at small rallies”. A failure to close above 10900 will ensure correction and beginning of Wave C. However, even if it does, the 61.8% golden ratio resistance level stands waiting at 11,100 which is a very strong resistance level and crossing that probably call for a new high in the index, which given the market climate seems far-fetched. 

Chart 1: Nifty (Daily) as on 30th Nov, 2018

There is eerie precision in today’s closing price which exactly coincides with the 50% retracement of Wave A

The above is a 30-mins chart. Today’s price movement shows uncertainty among the participants. Though the index opened strong, it continued to fell throughout the day and only closed slightly position thereby forming the doji we saw above.  The RSI had dipped below the level of 60 today for a while. As many may point out, it indeed is a bit pre-mature to conclusively point out that the rally is over for once but considering that oil prices are expected to bounce back owing to the cut in oil production, I think it is fair to look for evidences of weakness in the index too. 

Chart 2: Nifty (30-mins) as on 30th Nov, 2018

If Nifty 50 turns lower from this level, or even from 11100 which is the 61.8% retracement of the initial fall, more pain could follow in the unfolding of Wave C

Chart 3: Nifty (Daily) as on 30th Nov, 2018

That's all for the day! Stay tuned to my blog for more research on stocks, indices and commodities as and when I spot an opportunity worth writing about!

Thanks for reading!

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Balrampur Chini and Bata India: Stock analysis update

Hello Readers!

Please find the follow-up on the analysis of Balrampur Chini and Bata India below. I will be sharing the rest with you soon along with some fresh stock analysis!

BALRAMPUR CHINI: Give it a break! 

Ticker: Balramchin
CMP: Rs. 101.40

After our initial analysis  of this stock we also had a follow up post on it . Let us move on to the current chart's analysis. 

ANALYSIS: Having made a high of 120 from the level of 71 where we spotted it, Balrampurchini has started taking a healthy correction. Support appears to be at the level of 86-92 which is the 50-61.8% correction from the peak. Once that level is achieved, we will look at charts again and take a call about the outlook. However, owing to the government’s move of producing ethanol directly from sugar, I believe the fundamentals continue to be very strong. 

BATA INDIA: Ready for a Sprint! 

Ticker: BATAINDIA
CMP: Rs. 1004

Original analysis: https://kavitatechnicalanalyst.blogspot.com/2018/10/bata-india-walking-on-slippery-ground.html

Analysis: In the previous post we mentioned a lack of confidence in Bata’s up-move around 950 levels. However, despite the seemingly weak technical outlooks in my opinion, Bata touched a high of 1030 odd levels and turned lower for a correction which took it to the sub 950 levels. Post the correction the price of Bata has started rising again and this rally is supported by strong technical too as shown above.

The probably target at this point is 1100 in the near term.

That is all for today. Please do share your feedback, appreciation and especially criticism. You can reach out to me directly via email kchamaria1993@gmail.com. Dont forget to follow my blog for regular updates directly in your inbox.