Biocon - A case study for Long Term Investment

This is the monthly chart. Recently Biocon broke the support levels of 360-365 and this resulted in a major 10% fall upto 330 levels.

For long term investors, the question that arises here is - Where is the next buying zone? From which price levels the stock will show a bounce back?

Here we will learn the use of EMA or Exponential Moving Average . Every stock respects a different exponential moving average and hence a single EMA cannot be used as a common standard. From the historical monthly chart, we can observe that the stock has been respecting the 50 day EMA (more than 3 times) in the Monthly Timeframe for the past 8 years. Now the stock is coming down to the 50EMA support having broken the 20EMA support zone .

Thus we can initiate a buy around 300 levels, where the 50 day EMA support exists.

When to buy?
We should buy only when we receive multiple confirmations. Those should be:
a. Stock respects the 50 EMA support.
b. Stock forms a bullish hammer or bullish harami candle from the 50 EMA support.

Only when these two conditions are satisfied, we can initiate a BUY on this stock.


Holding 500 @ 460, any suggestions?
tksthathachari StockWhizzer
@StockWhizzer, Hi. It seems like you have caught the stock at the top. I will suggest you to practice maintaining a SL for every stock be it long term , short term or swing trade. In this situation, I would suggest you to sell anywhere between 50-60% of total quantity and book losses. The reason behind this is that you can easily invest the free capital from selling Biocon stocks to invest in some other stock and neutralize your losses in a short time. Time is money in market! Hope this helps.
+1 Reply
Thanks a lot, is this in uptrend now, also views on MnM fin, stuck with 500@180.
tksthathachari StockWhizzer
@StockWhizzer, Hi..Are you on twitter? Would hope to connect with you there. Thank you.
@tksthathachari yes Nickzy007