The counter has been in a downtrend and has corrected nearly 65% from its peak. The bears showed no mercy for any support and killed all bulls that came along to provide the support.The big bull Mr. Rakesh Jhunjhunwala also said to have increased the stake during recent past. Even the promoters of the company went on buying spree during the month of November or December and bought healthy quantities around 830 levels.Though the stock did show some recovery (perhaps due to these variable) it proved only short lived and again the counter entered the downtrend and made fresh 52 week low of Rs.750.15.
The counter is currently trading around 770 levels around 2.6% higher above its recent 52 week low of 750.15. We can see the some base formation exercise now around 755-760 zone. Even during today's session the counter formed a doji candlestick. Looking at the recent price actions we tried to analyse the counter mainly using RSI as a Technical tool. Though the counter made lower low, RSI didn't respond the same way as we can see the higher low of RSI. Technically it is referred to as Bullish RSI Divergence. Another important observation is that we can see the Bullish Failure Swing of RSI i.e. RSI went below 30, bounced above 30, pulled back but held 30 level and broke its prior high. All these RSI observations clearly hint toward a possible reversal in short term. If the analysis turns out to be correct we may see possible bounce towards 830-840 in a short to medium term.
Hence in view of the above observations traders may try to long the counter at current price around 770 with SL of 750 for the TGTs of 830-840. The risk:reward too looks attractive at this level. Worth betting, isn't it?
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