Aarti Industries
Till Dec middle investors and traders were not sure on this stock. Of course, this period comes after sustained buying till Aug 17. Then suddenly from 15 Dec you can see traders expanded heavily. They were ready to pay much higher price. Though investor agreed with traders they went bit slow, expansion was milder than trader. Once traders started booking profit from Jan 1st week (see the contraction in traders) they even cut through investors average. Investors although subdued have been holding to their beliefs and separation between them has been fairly consistent. This belief prompted traders to join buying queue till the time they have become inactive due to recent market selling.
Traders: have been fairly active, given multiple opportunities to book profits. Still buoyant on this stock.
Investors: strongly supported trend through thin and thick.
Rebound: even traders sold, the trend rebounded within a week. This shows ability to recover.
Trend strength: separation between traders and investors has been fairly reasonable. Even with recent market corrections. This indicates superior trend strength.
Volatility- Multiple expansion and contractions can be seen in short term moving averages. Stock in short term is bit volatile.
Look at 29 Dec 2017, when volume expanded by 20 times with a 6% rise. Result came in 03 Feb, After three years company reported a double digit growth in both Sales and EPS. Well now we know some people have analysed this before! What happened after results? It tried to move up but got into a consolidation range finally.
Very strong accumulation is seen here, even with a big spread day on 05 Jan, hardly supported by volume. Ultimately stock ended positive. Excellent ROE supporting the long-term investors to hang on for more time.
But bigger question what could have been ideal position to enter?
See the date 15 Dec 2017. After multiple weeks of contraction with low volume stock zoomed above 50DMA with 40-50% higher volume.
I think at this time this is still consolidating, I don’t see that constructive pattern in longer base. But if we look at last 2/3 weeks a constructive base is forming with contraction in price and volume. I would like to see a breakout from this zone after 2 weeks or more of contraction. That will allow the process to suck up the weak hands.