At current level ie 730-770 it is observed that stock is consolidating and trend has changed to side way
It has also consumed more time for deflation as compares to its previous rally.
Price has move in perfect channel which indicates that fall is not impulse.
RSI :-
RSI on daily chart is indicating some bullish consensus and indicating demand zone near 730-770 area.
Action plan
One can buy just dial with the stop loss of 725 for the target of 830-875-910 (for trader)
Investor can buy with same stop loss and may wait for higher targets , may expect 25%-30% return if it does not trade below 725 level on closing basis.
Report prepared by :-
Nayak Ajit Srinivas
Note :- Report prepared for educational purpose only , trader or investor need to do their own analysis .Author is not responsible for any loss .
The stock is in downtrend and overall market is downtrending. Any trade which goes against the market trend is not correct and can hit the stop loss. The stock is just consolidating before it is making its next down move.
you are absolutely right and market has punished for the same . it was in down trend and do mentioned . i was betting on triple bottom and RSI so 725 was my stop loss .
And i did not consider fundamental aspect since it was low risk trade .
I have read sethufan s comment he was completely right ,but i was of view that it may bounce bez of triple bottom.
I could have wait till it close above short term moving average .
Sir you are absolutely right all price has stages of confirmation and that too price and volume is more important factor it was an bottom picking trade , where one can have plan B to sell because if such trades negates will have momentum on other side here in this case momentum on sell side.
But i took risky entry with out confirmation was my mistake in this case but i have made nice sum in these type of ugly bottoms recently in hind zinc . It is Part of the game , got nice insight and learning which has sharpen my skills . And thank full to all members , i will be on nerves while taking any decision hence forth .
Sir i am waiting for your reply , i really need the source information that you have posted .If any other member can help regarding this please post the information .
Fundamental data is from website screener.in…check my “VP thread on fundamental analysis & valuation made easy”. Rating is subjective. you may have your own standards
Market doesn’t punish so much for slow growth. Even good co. gets slow some times.However in JD case people/investor feel, the future of JD or JD type biz model is not scalable/attractive.Its getting hammered like anything.Valuations are getting attractive, however question is will people use just dial.I use google, flipkart, amazon, naukri, irctc, clear trip…many other web services but not Just Dial.
From long term technical analysis perspective the data for this stock is insufficient for example currently the prices have entered uncharted territory, also what may have looked like a triple bottom could also be a triangle. In case of JD the price move seems to be what is known as a triple zig-zag formation in all probability. You can draw a trend channel and see that the fall from highs of the stock remains in a trend channel. This is how corrections work. In order to determine if this is a corrective fall (from highs ) that will be reversed completely or if it is a major trend that may lead to value destruction, you can use this channel to help you. If this is a corrective fall then you will find that the prices will break from this trend channel on the upside. If this is a major impulse move down indicating long term value destruction the trend channel will be broken to the downside. Un-fortunately since previous trade data is not available as the stock was not listed. We have to perform this kind of detective work to determine its future course. But seeing the price action so far imho this is a triple zig-zag at work and this is probably the final leg of the fall. This analysis will be confirmed once the prices break above the upper trend line of the trend channel.
PS: Nifty too has a triple ziz-zag formation which probably ended with an impulsive ending diagonal triangle on 20th Jan (which i happened to write an article on the same day http://in.investing.com/analysis/nifty:-possibly-ending-diagonal-formation-nearing-completion-380591). There is high probability that we may have begun a bull run as far as nifty is concerned. Nifty IT and Nifty Pharma are likely to outperform because they have lead this break so far. If some can suggest some good stocks to look at from these sectors, i would be grateful.
The channel I was mentioning … bounced off over it … interestingly the last fall came after a triangle… trends appearing after a triangle are the last movement in the direction of trend before it reverses for a substantial counter trend or a completely new trend.
With today’s up move it seems we have a 5-wave up movement in the stock which makes the recent lows a potential long term bottom. Though it is possible that the stock may substantially correct its rise from 380 before going to the next leg of the rally and break the upper line of the channel.
Disc: Went long on bounce from the trend channel, intend to add more on corrections. Will hold till the trend clarifies itself either way.
Just dial is not changing with time as it should be.
In this space ,there are lots of startup comes and eat justdial lunch.
Let’s me explain you deep :
Food - Restaurant
There are couple of startup come in this space and doing good as compare to justdial.
Zoomato [infoedge group]
swaggy
Foodpanda
many more …
Now think , if you want to order a food , will you go on justdial or will you go to this particular app/site.
2 . Service
If you are looking for plumber or want to repair your electronic things ,many startup doing more then the actual service.
Like they provide wallet to pay for this service,proper an invoice, verified service provider etc.
You can check
Will you go justdial for recharge or will you do from freecharge , paytm etc ?
I am seeing shift here, people are seeing more value in vertical business and company,
as compare to horizontal.
and vertical player can give you extra benefit and convince as compare to justdial.
You can see this shift in result as well as.
so My idea is not invest in it.
Just dial corrects from the trend line and is coming back to test the upper line of the trend channel again. Lets see if the trend channel is able to hold on 2nd test. A break of the trend channel for me would confirm end of wave 2 correction for the stock and a possible wave 3 in action, which is where major returns accumulate. If it manage to stage this break out in this leg the stock should be able to recover most of its losses from its peak. The right price action would be important, because if it is indeed a wave 3 there should be substantial rallies coming forth in this stock.
With the general stock market entering a more matured stage of the rally from 6830 on Nifty, it might need to tide over a substantial correction in the general stock market as well.
I think just dial might get a good up move from here, recent buyback by the promoters and also HDFC securities bought huge quantities. The chart also hints about the upmove, any views?
@manoopatil
They are currently at probably the lowest bottom business wise… But the stock price may not be at lowest bottom lol.
They currently have dual factors working against them…
Their entire target market ie smes are struggling and will continue to struggle for the next few quarters with lock downs in play and covid raging.
Their expenses have shot up with the launch of jdmart and they won’t make much ground here profit wise for at least 2 more quarters. So revenue will stay mute and expenses will continue staying high.
The comfort is that even at this low point there is no existential threat due to their huge cash reserves and no debt and low asset model. Also, their business model strength is showing since they have managed to keep a respectable amount of organic traffic with almost no ad spend. Their ad expenses for fy 21 was 6.8 crores vs 68 crores of FY20.
However, the green shoots are very much visible.
A few quarters down the line they’ll start spending on ads again and their inorganic traffic will aid their top line from what can now be considered base line traffic which is already pretty impressive considering its all organic!
Their jdmart venture should start generating returns towards the end of this year and while it won’t show on the balance sheet yet their Concall will be key.
What I suspect will happen is their Q1 will be a washout too so I don’t expect the price to go anywhere but towards its 200 dma levels over the next few months.
I also suspect q2 will be poor. So we have about 6 months of poor results and price pressure and volatility ahead of us along with opportunity costs.
Personally il be holding and adding at lower levels over this next year if it reaches on or under 200 dma levels. I’ve seen enough to know that once their ad spends are back to pre covid levels and covid goes back to ummm… Pre covid levels, and jdmart starts fructifying(I have huge faith in this venture) there will be a turnaround. If I had 4800 crores I’d buy the entire business though I’m pretty sure it wilI be available near 4000 crores soon… So while I feel its undervalued there may be a higher discount on the offering. I do think the management is capable and honest too and have handled this tough period + launch as best they could.
I also love buying cash rich, low debt, asset light businesses at their bottom and since its a platform based business all the better since there isn’t any corporate governance issues I can see so I don’t foresee losing too much here in the medium term even in the worst case scenario.
Will be attending the Concall and posting further thoughts on Monday night
