ITC India - 4 Reasons to be a bit nervous right now at 445

Although I am still bullish on ITC, there are some warning signs that anyone long / anticipating needs to be looking for and this may save you a lot of money if the stock does reverse from a test of 450+ - volumes have dried up recently indicating that there is not much supply at 450 (which is good)

• Stretched on the monthly / weekly momentum - although still positive, it is definitely on its last legs (unlike new breakouts like Indigo, Bharti etc)
  
• The base is being built - but might still need 1-2 weeks (previous bases took 2 months)
  
• Volatility is compressed and this is a positive. It touched 452 in this consolidation and also made a tail down to 430 - which is very normal
  
• If the relative strength goes down (compared to nifty) or if it cuts 440 on volumes, then cut off the trade.
  

Bottomline - Stay long and hope for a clearance of 455 very soon - on good volumes that too. Otherwise be ready to cut this loose if it reverses sharply from here on volumes.

Comment:

ITC clears 460 on decent volumes. Maybe able to touch 490 or so, which maybe a good place to take off the trader

Trade closed: target reached:

I rolled out at 480 - now will wait for the next base to form. 40 bucks (10%) is a big move for ITC in 2 weeks. It now has to (hopefully) - sit and consolidate.

I still think we are now in the 40th over of this rally in ITC. The last 10 could be big or could be a dump - either way will be exciting!