TusharDave

Long Consolidation - Excellent Results. Rain: a great example

NSE:RAIN   RAIN INDUSTRIES LT
81 1 1
RAIN - A small petrochemical company having trapped in a range bound trading range broadly between 30 - 50 Rs             since May 2015 to October 2016. The stock tried number of times hitting and closing above 55 - 60 Rs             range but failed every time until October 2016. The stock we first identified in 2014 when it registered a monthly Bullish Engulfing candle on the charts. But I was not convinced as the stock was far below the previous highest close of 51.45 in the month of October 2014.

We also noticed the Morning Star generated on the same monthly charts in the month of April 2016. The candle was quite strong and it was a strong bullish candle of 7.40 Rs             means almost 25%. We entered the stock at once at 36 rs             in the month of May 2016 and decided to hold it with the stop loss of 28 Rs             . It was in consolidation for next 2 - 3 months and then again it gave a jerk of 12 Rs             in the month of August 2016. The stock closed at 46.05 at the end of the month.

Next one month was again consolidation in the counter and then the month of breakout came. The counter opened at 46.20 in the month of October 2016 and hit the low of 45.60, just 0.60 Rs             and then started the upward journey by breaking the open of the month. The stock rallied to hit the high of 56.50 and closed at 52.40. Again the candle size of more than 10 %. Amazing returns since the entry. The stock first time in its history, closed above 50 Rs             level so convincingly. I had a mile on the face.

The month of demonetization was again the month of consolidation, rather say the month brought a little bit of worry as the counter hit the low of 42.00 on the monthly charts but eventually it recovered and at last managed to close above Rs             50 at 50.80. The real story begins. The stock started the northward journey since the month of December and hit "High pe High" month over month. The stock is trading at about 100 Rs             level after hitting the intra-month high of 109.20.

We are trading the stock with the trailing stop loss of 85 which is also the open of the current month. We have created a good return in this counter just by following the simple technical parameters. I believe that Technical Analysis just not ask for a great deal of expertise but simple tricks can also works in great manner.

Wish you all happy holy...

Happy trading...Trend is Friend...

Hi Guys,

What would be a good entry point in this stock for a longish term perspective?

Cheers
AJ
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