Technical Analysis of BENGALWTL on 29 Nov 2016
To be or not to be . . .
Let us see . . .
In this article, I would like to discuss a strategy of trading (based on Technical Analysis) using the example of Bengalwtl.
Background: I do not know much the fundamentals of Bengalwtl - last 2 years, EPS > 2 . . . This year it gave 10% Cash Dividend while last year it was 10% Stock Dividend. Currently PE ~ 20 seems quite high compared to other "fundamental" stocks which have relatively lower PE than Bengalwtl.
Technicals:
Long-term charts shows it is in a downtrend (wedge). Thus, this still poses a "risk".
Before a few weeks ago, its previous historical low was 40 - but this time, it went below 40 (low of 37.7) at which supply seems to have been exhausted at least, for the moment.
Present condition - it has been moving up from a "double bottom" and has crossed Major Resistance of 40 (which is now a support). Presently, there are two resistances above - one 45 and the other at 50 (very strong).
A possible strategy now is to take a position and see if it can break Resistance at 45 and then move towards 50.
There are 3 scenarios:
1. It hits 45 and supply overwhelms it and takes it back to 40 level.
2. It hits 45 and comes back to present level (where trader could make exit with minimum loss).
3. If it breaks 45, then 50 could give some profit (with low stress).
Considering today's trading, the index (which created a shooting star) and quite a few other stocks had reversal candlesticks (implying that some bull trends have come to an end). As there is supply in the market, some stocks will have selling pressure tomorrow (at some time during trading hour) - which might give the "risk-taker" an opportunity to take a position in Bengalwtl (here I would set the stop loss at 41.5).
Best wishes . .
To be or not to be . . .
Let us see . . .
To be or not to be . . .
Let us see . . .
In this article, I would like to discuss a strategy of trading (based on Technical Analysis) using the example of Bengalwtl.
Background: I do not know much the fundamentals of Bengalwtl - last 2 years, EPS > 2 . . . This year it gave 10% Cash Dividend while last year it was 10% Stock Dividend. Currently PE ~ 20 seems quite high compared to other "fundamental" stocks which have relatively lower PE than Bengalwtl.
Technicals:
Long-term charts shows it is in a downtrend (wedge). Thus, this still poses a "risk".
Before a few weeks ago, its previous historical low was 40 - but this time, it went below 40 (low of 37.7) at which supply seems to have been exhausted at least, for the moment.
Present condition - it has been moving up from a "double bottom" and has crossed Major Resistance of 40 (which is now a support). Presently, there are two resistances above - one 45 and the other at 50 (very strong).
A possible strategy now is to take a position and see if it can break Resistance at 45 and then move towards 50.
There are 3 scenarios:
1. It hits 45 and supply overwhelms it and takes it back to 40 level.
2. It hits 45 and comes back to present level (where trader could make exit with minimum loss).
3. If it breaks 45, then 50 could give some profit (with low stress).
Considering today's trading, the index (which created a shooting star) and quite a few other stocks had reversal candlesticks (implying that some bull trends have come to an end). As there is supply in the market, some stocks will have selling pressure tomorrow (at some time during trading hour) - which might give the "risk-taker" an opportunity to take a position in Bengalwtl (here I would set the stop loss at 41.5).
Best wishes . .
To be or not to be . . .
Let us see . . .
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