The public sector stocks are always an attractive pick. But with a great technical setup, it can be a good buy choice. The below is the analysis for GAIL India. 1. The trend formed is not exactly a wedge, it is like an inverted triangle. The high points were touched 4 times, thus establishing the upper resistance and rise in trend. Similarly there were higher-lows formation in the support zone. Establishing a bullish pattern. 2. The price movements resemble an Elliot's wave (within the inverted triangle) but then, they have to be tested for retracement but the waves are strong and clear enough. These waves are the price swings over the periods of time. The next upswing is expected to touch 180. 3. There is a gradual decrease in average volume, so an upward breakout is expected. There were similar volume-breakouts previously. 4. From High 3 to High 4 in price movement, we see that the momentum indicator has slowed down, signaling a divergence. And as the MACS divergence pointed, there was a sharp decrease in price. Now the EMA has crossed the signal line, so it can be the time for the next up-move. As, the price is now at the support level.
If the trend and waves keep the move going, we can see a good bullish move up. (PS. This is not an investment advice. Do your own due diligence before investing in any company)
Comment
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From 14th September to 11th November, we see that a head and shoulder pattern has formed. There are high chances for the stock to break the support and go down to the level of 141. Might be a good time to go short. (Do your own due diligence before taking any position in a stock. This is just an observation and not a trade advise.)
hey brother, how is it looking as of now? I cant really figure out what happened yesterday and today!
SK_tron
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what target do you expect by sep end?
Robert_Oppenheimer
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@SK_tron, From the support the wave takes 3 weeks to reach its high point and complete the wave pattern. So if it starts to rise now, then in 3 weeks it should be positively up, but it could take 4 weeks too depending on the wave length (not trendy waves, sideward movement too there). So by Sep end it must have reached the upper trend line.
SK_tron
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@adithya_ramani, ok you mean around 180? and do you see any bearishness as of last two days since it was a huge red candle the last day and a doji after that! please share your thoughts, thank you
Robert_Oppenheimer
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@SK_tron, the bearishness of the last 2 days has no enough volume to support it. If you notice the volume was less than average volume. The price must break out after the doji. Also, if you see, there was a similar sideward move during 25 March to 26th April, and that was followed by a up-move. So, a good rise can be expected
SK_tron
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@adithya_ramani, ok how do you think was the close today?
Robert_Oppenheimer
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@SK_tron, Today was good. Decent volume and it was a bullish marubozu after a doji, so it indicates uptrend
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SK_tron
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@adithya_ramani, hey how is it today?
SK_tron
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@adithya_ramani, why is it going down when all others like IOC,BPCL and COALINDIA are shooting up like anything, any thoughts brother?
Robert_Oppenheimer
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@SK_tron, Hi Brother, i will share the analysis with you. Coal India is increasing as they have announced dividends and the ex-date is 2nd september. If you notice the hourly pattern of GAIL, it has been making higher highs. The upper wicks are increasing but the close is a little lower. What happened on 31st was very nice, the stock was below the opening price for a major part of the day but during the last 30 mins, it increased and closed above its open, u could see 2 consecutive green candles. Many bears would have been trapped in that zone.
The next day, it started high and it formed a doji, it was followed by a 3 candle bear breakout pushing it to the downside (Manily due to the MACD divergence). But the real candle was the last 2 hours, where the candles were formed out of the support zone, which is worry some. Looks like its making a side ward move. the last candle of the day was a green, indicating that bulls were ready to push prices up. Tomorrow could be an upward push in prices.