Bearish Stocks /Sector
Chemicals Sector - keep in mind that most of the stocks tend to move in a herd ie. if the sector goes down , all stocks go down ( excpetions are M & A, management -change etc in a certain company)
Before we look at few chemical stocks, let’s understand one concept .
Climax Moves !
We all know the meaing of Climax. As per dictionary, climax means the most intense, exciting, or important point of something; the culmination.
Yes ,stocks also have climax moves. Climax is peak of euphoria stage, when stock moves very high in a single day ( UC type of move) with high volumes and then starts correcting from that level.
Most of the times, stocks don’t touch those levels for months/years to come. ( be careful , these things happen at the peak of the bull markets and and prices of stock go to such levels that even the most loyal followers of the company can’t justify the valuations)
The following picture has 3 stocks and their climax-moves -
Comanies are -
IEX, IRCTC ,Aarti Industry -these climax moves came between October 20th and Novemebr 1st week. And since then,these are correcting for last 7-8 months.
These climax moves in few of the bull-market-leaders also act as
early signs of a bull-run where bulls are getting exhausted and for coming correction.
Now let’s look at certain probable set-ups of chemcal stocks 
Tata Chemicals
A clear bearish divergence is visible on MACD for last few months if you happen to check the monthly chart.
It seems to have completed its 5th wave (larger wave 1 ) in October and after that it is in complex correction .It is still in Stage 3 , just hanging on 30 WMA - as soon as it breaks 920 , that would be the next sign and belaow 900 ( 40 WMA) we might get final conformation of break-down)’
Deepak Nitrite
It had its Climax move somewhere in October 21 . And it also came in Stage 4 few weeks back.
It has completed its larger wave structure and is now in a complex correction structure for last few months.
Can touch lower end of falling channel where A will be equal to C ( final leg of corrction Z ) and that would also be 30 months moving average level, where this share tend to take support in the past 6 years.
AARTI Industry
It had its climax move in October 21 and has corrected 40 % from there.
If we look at mothly chart, it has broken 9 years long channel.
Monthly MACD cycle is yet to go below the zero line, thus indicating that there is still a chance that can stock can correct another 10 % from current levels . And that would also be 40 months moving avergae support.
If it breaks 40 months moving average also ? Well , let’s wait for that
Fine Organics
The stock gave its climax move on this Thursady only and it has corrected 18 % in 2 days from the climax move.
Climax moves are just start of downfall in a stock as we’ve seen in other charts . Let’s see what happens in Fine Organins in coming months.
Disclaimer : Charts studies are based on old patterns , price-behaviours in different asset classe. They might or might not work. But as they say, history does not repaeats but it rhymes.Let’s see whether it rhymes this time or not. Don’t take these charts as recommendations of any type.