HINDUSTAN UNILEVER BREAKS DOWN AFTER POOR EARNING RESULTS

Jul 23, 2023

TECHNICAL ANALYSIS :

1. ASCENDING RECTANGLE BREAKDOWN -
   
   Price has broken down from the ascending rectangle pattern with confirmation
   
   
2. VOLUME SPIKE -
   
   On 21st july, price has shown huge volume spike with the breakdown indicating strong downward momentum
   
   
3. 50D SMA BREAKDOWN -
   
   Price has broken out of the 50D sma after consolidating above it for a long time making it a very strong resistance zone
   
   
4. STRONG SUPPORT-RESISTANCE ZONE BREAKDOWN -
   
   A very strong support-resistance zone level has been broken down by the price which had earlier acted as either strong support level or strong resistance level multiple times
   
   
5. OVERSOLD RSI -
   
   Cherry on the cake is that rsi is oversold indicating very strong momentum behind the breakdown
   

FUNDAMENTAL ANALYSIS :

1. EARNING MISS -
   
   On the jun'23 quarter HUL has missed its revenue forecast by ~2.5% & profit forecast by ~4% indicating poor performance by the company
   
   
2. STIFF COMPETITION -
   
   The regional players who had left the market during peak inflation have returned as inflation subsides indicating even higher competition for company
   
   
3. MUTED DEMAND -
   
   Company has said that the demand in rural areas has not yet picked up and consumers are still preferring unbranded alternatives compared to its Tea brand
   

TP - 2700
SL - 2560

Jul 26, 2023

Trade closed: target reached

Target has almost reached (just 2 points left), hence close bearish positions