Hindustan Unilever - Ripe for a Short Term Correction?
Hindustan Unilver, is a Defensive & a Low Beta stock. In past four months when Index has done nothing this stock has moved up by 30% from 260 to 340 levels. Now its in a correction mode & has formed a Rising Wedge Pattern (Bearish - Reversal Pattern). Stock is in Primary Uptrend & undergoing correction in intermediate trends.
Hindustan Unilver - 3 Year Daily Chart
A fall below Upward Sloping Trendline would confirm this Bearish - Rising Wedge Pattern & would move the stock down. One can short this stock below 320 levels keeping a Stop Loss of close above 320. Target for this pattern is the width of the channel. Stock can come down to 310-300 levels.
Hindustan Unilver - 3 Year Daily Chart - Fibonacci Retracement Levels
In a panic market, If it comes to 280-260 levels (280 is also 50% retracement level of the entire rise from 220 to 340). It'll be excellent levels to add for Long Term.
Indicators:
MACD is in sell mode.
RSI is below 50 & making lower tops & lower bottoms.
Bottom Line: Bearish in Short to Medium Term. But Bullish in Long Term. Long Term Investors can accumulate it around 300-310 levels & add more around 280 levels.
Market Wisdom: When Markets are bearish & are in a tight consolidating range or in a bearish mode. It's the Defensives that outperform.
31-Oct-2011 An Update: The pattern dint even get activated as the Stock did not close below 320 levels.
Happy Trading / Investing. Would be glad to receive comments from all on the views expressed.
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