This company has been moved to trade2trade and has witnessed 5% growth in the last two day. Is this a sign of an immediate uptrend? There were reports of it touching 110 by the end of this month. Can anyone shed any light on this?
I'm no TA, but I'll attempt to analyse Hyderabad Industries using Gann's methods. Take a look at the attached chart.
This stock was accumulated for quite a while since its listing, until it finally broke out of its accumulation zone (between the parallel green channel), on 26 July '04. It has been on an uptrend ever since, until it met with a major resistance at 81.5 on 7 Sept. This is a difficult resistance to cross because it lies at a very strong Gann angle with respect to both price and time. It bounced from there, as expected, and is currently testing its earlier high at 81.5.
The important support points for this stock are: 65, 50, 36 and 26. The major resistances are at 101, 122 and 144. A major cycle turning date is around 8 Oct and 9 Nov.
Seems to me that, it wouldn't be a good idea to rush into this stock at this point. The cycle turning is far too close to the major resistance zone.
There are two possibilities now:
(1) If the stock is unable to cross its earlier high of 81.5 (preferably 82.5 to be on the safe side), watch the break of the upward-sloping blue trendline for support levels. Remember then, that this stock might then go into a distribution zone and finally turn bearish until it reaches its critical supports. Watch for another round of accumulation, or a change in trend when that happens.
(2) If the stock can go up above 82.5 and remain there on a closing basis, BUY BUY BUY. It will rally up to the resistance levels mentioned above. If any of the resistance levels are very close on a cycle turning date (9 Nov is the next one) then place a very tight stop-loss to protect ur profits.
A note on volumes: The last time it topped on 7 Sept '04, the volumes had been many times over of what they are now. In fact, this time it has been rising on falling volumes, as is evident in the chart. This is definitely a bearish sign. Also, some indicators are showing bearish reverse divergences.
So, don't rush in, just because someone says some blah-blah-blah... wait and watch.
great effort on hyderabad industries....i was watching its rises with interest, though
never bought it....i am sure, all members will appreciate your insight into the price
moves of this stock.
Remember that: There is a major cycle turning on the Nifty due around 15 October (9 months from Jan '04 top, 6 months from Apr '04 top, 3 months from July '04 bottom), so keep a very strict stop-loss according to your risk capacity.