As we
know Stock Market is well performing from last few days, we were among few
peoples who have said market will rally despite bad economic news. What I
believe is that always trying to see behind the scenes or read in between the
lines.
I always remember one line quoted by Humphrey B. Neill is "When everybody thinks alike, everyone is likely to be wrong."
We will see if there is some stocks which is still not
rallied too much. This time I found one stock which is showing reversal in
trend with a really good indicator like reversal Head & Shoulder pattern.
That stock is Punj Lloyd; below is technical analysis of
day Chart of Punj Lloyd.
Punj Lloyd has made lower tops & lower lows from 54
level till 20, it was severe down trend for it. I have drawn a trendline to
clear downtrend view. This trendline broken out on 5th September
& from that stock has managed to stay above this trendline.
Here we can see a reversal Head & Shoulder pattern is
forming, is seeing that stock is ready to break its Neckline in coming days. At
somewhere when Punj Lloyd goes above 26 it will confirm the breaking of
Neckline which will be very bullish sign for Punj Lloyd.
A 14 day RSI is also conforming its uptrend, we can see it
in figure. RSI is continuously making higher tops & higher lows. It is now
at 55 level, it means stock is not in overbought territory, there is more room
for stock to rally in coming days that what I think.
A
14 day ADX has given trend reversal, average directional index(ADX) is below
than a Minus Directional Indicator(-DI) & a Positive Directional
Indicator(+DI), that give signs that stock will move more higher levels in
coming days.
A 50 EMA(Exponential Moving Average) is very much near
to price, stock is currently trading at price 24.80 & 50 EMA is at 25.60.
breaking of 50 EMA confirms a bull trend in coming days for any stock &
same will apply to Punj Lloyd also that what I think.
When we look
at recent rally for Punj Lloyd to 26.20 from 20.10 level, we can get wave 1 at
26.20 which started from 20.10 & if we have Fibonacci retracements by
attaching these two points, we get retracements at 27.85, 30 & 36, these
can be targets for Punj Lloyd if it breaks Neckline what we discussed above.
In all we can say Punj Lloyd will be good buying opportunity
if it confirms its uptrend by moving above 26 level.
It’s all assumptions based on available technical data
which we can see in chart, it means we always have safeguard for our trade
& that is Stop Loss & that will be below neckline or 25 odd level.
See syllabus for Technical analysis training in Mumbai,India.
Please
read our disclaimers before investing http://tradingkamai.blogspot.in/p/disclaimer.html
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