Tech Mahindra is another stock that’s coming on my screen as kinda real oversold and ready for a reversal (refer to my post on BEL yesterday…it’s up by 1.5% today). Posting below is the daily chart (on your right) and the hourly chart (on your left). The daily has clear BEARISH annotations to it; it’s trading below the 200 periods MA, both the 20 and 50 periods MA’s are sloping downwards with 20 cutting across the 200! Technically TechM is at important support coz below this we just have the 800 by the virtue of being a whole number support and then some logical support comes in at 750/60!
From the hourly chart above we can see price is kinda stalling and looking for a pause. 830/35 is proving a chore for it…the 20 periods MA also there. A tradable OS bounce from here can take this to 850 and 860/65 provided the Nifty obliges!
I am not suggesting that it will reverse from here definitely, what I am tryin2say is that when you come across such oversold stocks you are better off if you monitor and follow them every day. When they begin to reverse place a protective stop under your buy point and go long. If a stock is dropping stay on the sidelines and wait patiently for some reversal signs. Most of us have a difficult time with the concept of overbought and oversold and especially Divergences coz many a time we tend to act on Divergences formed o horizontal ranges…a strict no-no!!!. We all know now (the market is a great teacher) extreme bearish conditions become bullish and extreme bullish conditions become bearish. The key is to ascertain the degree of both conditions and taking the call!
6 comments:
Nice post on Tech Mahindra.
Will defenitely watch this script in days to come and will go long once it trades above say 835 with suitable SL.
I have now started tracking you since few days and your analysis is good .
Appreciate your work on BEL,Nifty and ONGC.
Kiran Hi
Welcome here and thanks for those kind words!
Cheers!!!!
Hi,
I generally don't do day trading and hold stocks for 3-4 weeks. What would you recommend me. Should I still wait for it to reach 800 or just buy it at around 810-815, because I really don't want to miss-out on this good opportunity as IT companies are about revive their golden times.
Sunny Hi
Sorry to dissapoint you but I dont do the advisory thing....too dangerous...
I have written above what I could comprehend from the charts (dont know if there is any funda news hidden or otherwise waiting to pop out)!
I am also not into daytrading....but yes hourly trades do give you good swings which pan out in 3 to 4 days!
Buy techM in traches if you like the company (many other good scrips in IT also)
Cheers!
Dear Manoj,
Thanks on the TM update. Am away from this counter for quite some time. You have enthused me to watch.
Is it ok to request you to keep a permanent tab on high volume,volatile and heavy weights as ABAN,TISCO,TMF,ICICI,... Can help both day and positional traders. Just the list with current position as you feel.
Thank you. Good Day.
Thank you for your inputs. Actually I was badly hit when I invested in GSS America last time, hence now, I only invest in mid to large caps.
Anyways, Tech mahindra again went to 230s for this stock, I will wait till it reaches 810-815 levels.
Post a Comment