Thanks for checking.
1st one quick insight- stock-price of every company moves into cycle (we all know that ) . Now during down-cycle , it has two elements ( a) price-correction (b) time-correction ( price moves with -in a range) . Stronger the company, longer the time -correction and lesser the price -correction . The purpose of both of these type of corrections is to frustrate the non-serious investors , the free -riders (in layman’s terms) .
Many a times when price runs ahead of earnings (due to future growth projections), either the price should correct or it rests in a range to catch-up with earnings growth.
PolyPlex - Quick check.
Please keep in consideration that we don’t comment on day-to-day movement of prices - we tend to look for mid-to-long term trends .
It is a beautiful chart - moving in a channel from May 2020 – did not break the channel even in recent correction. Also it is moving above 9 months moving average (pink curve) , came below it in June but did not close below that and also took the channel support at the same time and bounced back.
Other point to note here is that it corrected upto 38 % of FIB level ( of the rise from Covid lows to ATH).This is also a good sign. In these type bear markets, many a times stocks tend to correct upto 50 -78 % levels . If the stock corrected upto 38% level only, that means it is in strong hands ( big money)
On weekly, it is taking a support at 40 week moving average (green curve)-never closed below it since the days of COVID lows.
What can happen next ?
Stock became more than 10 X from covid-low levels. To us, it seems to be in time-correction as of now ( it seems price correction won’t be much) , can move in a range between 2000 to 2500 for next few months.
Can it go up ?
Well it depends upon liquidity in the market and overall sentiments .For moving up, it should first trade and close above 61.8% & 78 % level of retracement of current decline ( 2530, 2700 respectively as shown on weekly chart) and then it should cross and close above recent ATH for few weeks.
Can it go down ?
Anything can happen in the market !
If we were at your place, we would track it weekly and monthly. We would draw a channel as well as would use weekly and monthly moving averages as pointed out in the charts.
On every weekend - we would check that it does not close below 40 week moving average for more than 2 weeks, and it does not close belwo the channel.
On every month-end - we would check that it does not close below 9 month moving avergae for more than a month and does not break the channel.
If we were holding this stock from lower level, we would keep it holding it for long term as overall structure looks good. And if we were not holding this stock, we would try to buy when it again comes close to lower end of the channel and track it closely before adding more or exiting.
Disclaimer : Charts are for study purpose only. Opinions are personal- can go very wrong. No suggestions , no recommendations.