Technical updates

Hemantji, Hiteshji, Tonyji and other technical analysts,

I have a basic query on technicals. Should one look at stock charts adjusted for dividends or without adjusting for dividends?

If the dividend amount is large, then the price falls substantially on ex-dividend. This sometimes causes break-down or sell signal on charts. Are these valid signals? If dividend is adjusted, then there is no break-down or sell signal. For example, if we look at Accelya chart below, it shows that trend is broken but if I adjust Rs.40/share dividend, then there is no break-down. Chartlink does not seem to have a facility to adjust dividend.

http://chartink.com/stocks/accelya.html

hi rskm,

all technical charts should be looked at on dividend, bonus and split adjusted basis.

thanks,

hemant

http://chartink.com/stocks/accelya.html Link: http://chartink.com/stocks/accelya.html

Hi Tony,

How is Ajanta looking technically? Your all time high target has been met now.

Time to sell? Can it correct 20% from here?

Hi Hemant,

Could you please share your views on Balrampur Chini and Renuka sugar from OEW perspective.

Requested Tony too for his input too PnF charts .

thanks!

Regards,

Niranjan

hi jatin,

ajanta has made new highs and still consolidating nicely close to it. stock continues to be in uptrend. important support is at 630. in case of crash, 530 should be very tough to break. i am expecting another set of new highs soon enough.

hi niranjan,

nothing major to report on these two stocks from OEW perspective. these stocks continue to be in bear markets and i am yet to see a five wave uptrend to confirm that atleast a sustainable rally is underway.

Dear Hemant,

Congrats most of your predictions have com true.

Whether It was Cera ,Astral,Ajanta,Mayur,Accelya ,Atul ,Hawkins,Amar Raja the hit ratio is too good.

Thanks.

Besides Shilpa can we nibble at Mayur, Ajanta, Alembic Pharma ,Kaveri Seeds at CMP for short n long term perspective? Any other stock you like at CMP or on lower levels?

There has been an interesting takeover of an Indian IT product co Foursoft by a PE backed Kewill, a MNC operating in same transport sector ala Accelya taking over Kale consultants.

They hv just announced a dividend of 29 rs on CMP of 40.

PE here is Francisco Partners a corpus of $ 7 billion having invested in names like Office Tiger,Primavera,Lumata,n others

Whats your take on Foursoft ?

hemant,

Can you provide your views on Biocon based on charts.?

thanks hitesh.

thanks for the kind words vivek. this forum and its participants have given me a lot and once in a while i try to give some back.

mayur - if you remember from my last analysis, i was expecting the stock to finish the wave 4 correction and go on to make new highs in wave 5. this has come true and we are now in wave 5. what remains to be seen is whether this would be one final rally or this wave would sub-divide.in case, this wave is subdividing we should see it holding 220. targets in that case would be much higher - 325-350.

of the rest of the stocks, i like kaveri, shilpaat current levels and PI, poly med at slightly lower levels.

vivek,

don’t track foursoft. chart is too speculative to comment

hi hitesh,

biocon has a primary wave 1 rally from 88 in end 2008 to 450 in 2010. it corrected in 3 waves till 215 in 2012. stock has since rallied in 3 waves until now. this could either develop into 5 waves which completes an impulse and ignities primary 3 or could bea B wave rally with C wave correction to 215 or so to follow. a weekly close above 385 would confirm that correction is over and we are on our way to new highs and beyond. i would keep an eye on that level.

bea

hi hemant,

thanks for the updates.

On ground level things seem to be improving for biocon with their deal with mylan (post the failed deal with pfizer) and presence in some niche areas like biosimilars, insulins, etc… Oral insulin may or may not succeed. They seem to be turning aggressive in the Indian prescription market as well.

Coming to technicals, the stock arrested its correction at around 61.8% levels after rally from around 85 to 470 levels. Now since its uptrend it has been making higher tops and bottoms… It has also managed to clear its congestion zone of 300-320-330 and is consolidating above it…If it can clear recent top of around 360 with good volumes, things could be interesting and if as mentioned by you as a possibility, wave 3 up begins, things could turn real interesting. Some momentum indicators like MACD, Price ROC, ADX, etc seem to be well poised on monthly charts…

lets see how things pan out. results are due on 24th oct for 2nd quarter… first quarter was better than expected.

Dear Hemant,

What’s meant by subdivision n what’s is its impact on Mayur? Could you explain in simpler terms? What’s your estimate of Mayur earnings for next 2 years?

various templeton funds have slowly cornered over 5% equity in biocon. They had nothing last year.

hi vivek,

a subdivision occurs when an impulsive wave of a five wave uptrend extends itself into five waves of smaller degree. this gives rise to much higher levels. i expect mayur to generate 20-25% cagr over next 2-3 years.

Hemant,

I admire your technical analysis.

Did you anticipate that market will make new high ( or be near to it)? How do you see market situation going forward? What will be the right time to do some selling?

hi nani507,

frankly speaking, 6 months ago i was very bullish and i believed our market is in primary 3 and we would see much higher highs. thereafter market came very close to breaking some important levels and i did turn bearish on the index but believed that few sectors like pharma, IT and consumer were still in bull run. seems like these three sectors have pulled the index back from the brink. now we are sitting at an inflection point. If we break this all time high convincingly on weekly closing basis, we could be on our way to much higher index levels. until then, we could consolidate for few more months. I have been bullish on individual stocks all this while and haven’t sold anything yet. i have infact added to ajanta, kaveri, PI, shilpa on dips.

Your prediction on Mayur Uni again coming true.

Whats your take on Ajanta Pharma.Can I enter at CMP or wait ?

Biocon has breached resistance bhaiya…

Regards

mallikarjun