Thanks Hemant. Your lucid explanation reminded me, I need to read up Bala’s primer on Technical Analysis/charts posted many months back - before asking more questions:)
But - Amazing how fundamental margin of safety ball-park figures and technical support levels are converging in this case:).I made a case for myself to buy Kaveri all the way upto 1400 to max 1450. So even now if it corrects to 1400 and below I will be buying.
btw what was the last line from you…(didnt get it any typos for 186)…this analysis is valid only if kaveri doesn’t close below 186 on any day. if it does, analysis is invalid and the uptrend is over in my opinion.
The stock is currently in the X column and in the BUY SIGNAL. If the stock corrects to 1450 then it will change to O column and there will be more sellers than buyers. It can find support at 1340 and then strong support at 1300 where earlier it made a triple top.
The stock will correct I feel, looking at the RSI and CCI which are both above the over bought levels.
following on my previous mail, stock is behaving as expected, the first minor wave started at 1100 in march and finished at 1634 and minor 2 provided a sideways time correction between 1634 and 1512 which indicates good strength of the stock. new closing high this week indicates that now the minor 3 wave is underway. initial target for this should be 1842(minor 3 = 0.618 x minro1) and then possibly 2046(minor3 = minor 1). if it extrends beyond the second target, we would revisit. after this minor 3 is over, minor 4 should provide a decent correction lower before minor 5 makes a new high to finish off the uptrend. this is just a roadmap.i will update on this as we go further into the uptrend.
The stock is getting into uncharted territory. It has made a new high and one does not know where the stock can reach.
As per Point and Figure charting, we do a PRICE OBJECTIVE analysis. According to this analysis, I feel the stock can move right up to 2380 on the up side. On the down side the stock will have support at 1260 where it will test the Bullish Support Line. So the risk reward for this stock is as follows:
Reward: 2380-1650= 730
Risk: 1650-1260=390
So, one can draw a conclusion that the reward for holding on to this stock is greater than the risk.
All those who lost the chance of buying this stock should not enter it at this price, but wait patiently for the stock to enter the O column and buy it on a PULL BACK at a lower price level around 1300. Remember, that price objectives are not absolute levels, they act as a guidance.
Since we are talking Techno-Funda here, not merely the charts, shouldn’t we be keeping in mind what the market knows about expected results, and factor that in.
Given the expected results, why is 1300 levels a possibility? Or are you saying, as we move nearer the results day, week by week the charts will start capturing the positive/negative sentiments - what the overall market feels about Kaveri’s results?
Technically, Kaveri has crossed its all time high of 1625 and now is in a free zone…
usually once a stock price crosses its all time high, there is a small amount of consolidation in a tight price range… Looks like kaveri is currently establishing a consolidation range… upsides seem to be around 1670-75 whereas on downside it could range from 1600-1620… next few days should decide the range…
Breakout when it happens should target first 1800 and then subsequently 2000 plus.
There are various reasons for a stock to rise. Some of it is based on fundamentals, technicals and more on emotions.Whenever a stock rises, it can never keep rising in one directions. For whatever reasons, it always changes direction. The law of demand and supply comes into play. When the supply exceeds demand, the price will always fall.
Tom Dorsey says its like throwing a ball in the air. At some point it meets resistance and starts falling. It cannot defy gravity. So is the case with stocks.
If you look at the chart carefully, you will see that in the month of February, 2013, the stock rose to 1550 and thereafter it gave up its gains and fell all the way to 1100 in March, 2013. This shows that there is every possibility of any good stock correcting for various reasons. If the markets are volatile and there is fear prevailing, even the best of stocks give up their gains. One can make money only when you buy good stocks at reasonable prices. My personal view is not to enter Kaveri at its highest price, but wait for things to cool. Memory is short and investors move to other stocks for quick gains. So if one is patient, there is always a chance of getting it at a good price.
I do agree, sometimes it does not work. So let the train pass, another will come.
My experience with Ajanta has been on the same lines. I bought 350 Ajanta at 360.When the price moved up last time to around 630 I sold 200 and bought 200 at 580 levels. Then resold 200 at 890 levels . It fell once again to 790 levels and I bought 200 once more. Now it is again at 930. I keep booking profits again and again. This strategy has paid rich dividends for me. I learned this from Hitesh and Hemant Gupta who are real masters at this game. Their portfolio keeps churning.
The whole idea behind giving you the example of Ajanta is that even a good stock gives you an opportunity to buy it again on dips. A strong stock should always be bought on dips. Kaveri too is a strong stock. I am waiting patiently for my time to come.
ATTACHED KAVERI WEEKLY LINE CHART SHOWING AN INVERTED HEAD AND SHOULDERS PATTERN BREAKOUT WITH TARGET OF 2000 PLUS. THIS COINCIDES WITH OUR FUNDAMENTAL ASSESMENT OF THE PRICE TARGETS.
I am new to this group and am just exploring around. I had been looking for a program for PnF charting and the link you have given below is a GREAT site. Have yet to play around with the editing features on the page, but its great. I also tried out a few other co’s like Page and it comes out in no time at all. Thank you for the link.
Also:
I am also in awe of the field-study team headed by Donald Sir… It’s awesome. The comments posted give little little important info about companies (for example how Ruchi Soya and others are playing the premiumisation game etc…)… This site is truly different.
I have heard of you and your good work too at ISG(?). Yes we give lot of importance to field-work at ValuePickr and slowly we are getting more and more folks to join this effort - hard work but very rewarding…as we have seen there is no other substitute for gaining CONVICTION:) in businesses where the products/distribution network is such that you can touch and feel… unlike something like say specialty chemicals or such stuff where we have no touch point with the product or end-customers.
Please introduce what you have liked to more of your friends and fellow- investors, so that this tribe of field-workers can keep growing!
The delay in my response is because I was out of the country. Sorry for the delay.
Kaveri is is consolidation mode after the big rise. Presently it is trading above the 25 day EMA which is at 1583. It should hold that level. The short term indicators are also showing the consolidation. Here is the chart
Nothing seems to have changed for this stock which is currently in a strong up move. It is in a BUY SIGNAL. I won’t be surprised to see it giving a fresh break out. This could happen with results round the corner. On the down side it has support at 1600. If things really get worse or messy then the next support is only around 1260. As I have always said, strong stocks are always a buy on corrections or dips.
Feel free to explore more on Point and Figure charting. If you are interested, give meyour email so that I can send you a book on Point and Figure charting which is like a Bible to me. You can read my analysis on this site under Techno Funda Picks on this blog. If you have any query, I will be very pleased to be of assistance to you. Welcome to Valuepickr.
