Breakout Candidates - 25-Oct-2011

Hindustan Unilever

Hindustan Unilever - 11-Oct-2011 - In this corresponding post I had identified a pattern that might occur if 320 on closing basis was broken. But as they say markets are supreme & patterns can get invalidated. The pattern did not become active as the stock price dint close below 320 in these 10 days (8 odd trading sessions). 

On Friday it bounced off a key support levels (Demand Zone). Today it broke out above the Resistance trendline & is ripe for a fresh move of 5% atleast & if the overall scenario remains good can move much higher. Also today its close competitor ITC came out with good numbers (Especially the FMCG segment delivering good gains on growth in margins).

HIndustan Unilever - 2 Year Daily Charts

Trading Strategy: Can Initiate Long positions around current levels or if it dips to 337-335 levels keeping an Initial Stop Loss levels of 330 levels for targets of 345-350 & higher if markets remain conducive. 

HLL is one of the Low Beta counter & hence any fierce rally in NIFTY may not translate in fierce rally in HLL & vice-versa.

Bajaj Auto

It's third time lucky for Bajaj Auto, after 2 unsuccessful attempt to breach 1650 levels, Bajaj Auto has managed to close above it today. 

Trading Strategy: Can Initiate Long positions on dips around 1670 levels with Initial Stop loss being  1650 for Medium to Long term targets of 1800+ Levels (Should be above 1650 levels). In short term still has strength to move up by another 5 percent if things remain conducive.

It would be prudent to take positions post RBI Meet morrow or to be even more safer on Friday.


13-Nov-2011 An Update: Both the Stocks rallied well. Infact HLL made a 10 Year high by closing above 370 levels. It's currently holding well at price of 395. Bajaj Auto to moved swiftly to 1820 levels & currently is consolidating around 1700-1750 levels.

May The Trades Be On Your Side

Hindustan Unilever - 11-Oct-2011

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.