Varroc Engineering is focused on designing, manufacturing and supplying exterior lighting systems, plastic and polymer components, and electrical and electronics components
Market Cap : 5000cr Market Cap set your positions accordingly
Sector : Auto Ancillary
VARROC ENGINEERING is in a 4 month trading range, the analysis done above is through Wyckoff method and we get what looks like a accumulation TR (trading range).
PHASE A : The TR got established from 15th September where it did the highest volume since it's IPO in 2018. Labelled the PSY , SC , AR as Upthrust Action followed by a low spread Secondary Test on good volume leaving a wick and closing in green shows hints at some absorption happening that marks the PHASE A and CHoCH ( Change of Character ) the bias for the TR at this point is bullish.
PHASE B : Secondary Test on 21st October with huge volume but closed below the AR 319.80 level which shows rejection, at this point we can conclude the price is not ready for the markup phase and still needs to spend some time in TR followed by the price falling off with low volumes and low spread indicating no further new selling but also fall in demand till 16th Nov where the price went below the ST in PHASE A but on low volumes then buying demand came and closed above previous 4 Days close with fair volume and good spread.
PHASE C : The hardest part is identifying PHASE C but it is the only thing matters followed by PHASE D in Wyckoff Method.
16th - 17th Nov the stock had good volumes and good spread indicating SOS rally but failed to closed above AR levels , also the following week/month Nifty ( Comparative Index/ Market Proxy ) had faced Volatility on the down side and 29th Nov being the biggest fall in Nifty since 2 quarters but the underlying stock didn't broke the ST(PHASE B) levels. This shows positive jump in Relative Strength and the start of it.
On 7th Dec the candle showed some demand and followed buying crossing above the AR, ST(PHASE B) levels giving couple of closes above the TR so we mark the low on 6th Dec as LPS (Last point of Support) and Conclude Phase C. Though we missed our First of Four entry points but given the Volatile Market conditions it was hard to Initiate.
PHASE D : PHASE D in the Wyckoff Method indicates a SOS ( Sign of Strength) TR above the previous TR , BU ( Backing Up Action) and LPS/ Multiple LPS.
In this stock's case after the SOS rally the volumes cooled off with slide in price we mark the last swing ended as ST=UT because it wasn't a SOS because the price failed to sustain above the TR and came back in the TR , the market proxy faced huge volatility and made a new low from it's previous levels with big spreads but the underlying stock didn't made a new low thus forming a Higher High - Higher low formation showing relative strength even though it closed -9% and the price is now rising with lower spread and volumes, thus we mark the low as LPS.
We make a uptrend channel by connecting two lows and the high.
Conclusion :
Scenario # 1 : The stock still seems to be in PHASE D also trying to cross above 200 Dema and 100 Dema if it shows SOS above 336 we can expect PHASE E (Markup PHASE), CHoCH and we can start a bull campaign and further add positions with trailing stoploss on LPS/Channel/DEMA.
Scenario # 2 : If the price breaks Channel we can expect that the stock needs to spend more time in TR.
Scenario # 3 : If the price also breaks LPS then the TR can be extended way further or can be concluded as a Distribution PHASE .
Market Cap : 5000cr Market Cap set your positions accordingly
Sector : Auto Ancillary
VARROC ENGINEERING is in a 4 month trading range, the analysis done above is through Wyckoff method and we get what looks like a accumulation TR (trading range).
PHASE A : The TR got established from 15th September where it did the highest volume since it's IPO in 2018. Labelled the PSY , SC , AR as Upthrust Action followed by a low spread Secondary Test on good volume leaving a wick and closing in green shows hints at some absorption happening that marks the PHASE A and CHoCH ( Change of Character ) the bias for the TR at this point is bullish.
PHASE B : Secondary Test on 21st October with huge volume but closed below the AR 319.80 level which shows rejection, at this point we can conclude the price is not ready for the markup phase and still needs to spend some time in TR followed by the price falling off with low volumes and low spread indicating no further new selling but also fall in demand till 16th Nov where the price went below the ST in PHASE A but on low volumes then buying demand came and closed above previous 4 Days close with fair volume and good spread.
PHASE C : The hardest part is identifying PHASE C but it is the only thing matters followed by PHASE D in Wyckoff Method.
16th - 17th Nov the stock had good volumes and good spread indicating SOS rally but failed to closed above AR levels , also the following week/month Nifty ( Comparative Index/ Market Proxy ) had faced Volatility on the down side and 29th Nov being the biggest fall in Nifty since 2 quarters but the underlying stock didn't broke the ST(PHASE B) levels. This shows positive jump in Relative Strength and the start of it.
On 7th Dec the candle showed some demand and followed buying crossing above the AR, ST(PHASE B) levels giving couple of closes above the TR so we mark the low on 6th Dec as LPS (Last point of Support) and Conclude Phase C. Though we missed our First of Four entry points but given the Volatile Market conditions it was hard to Initiate.
PHASE D : PHASE D in the Wyckoff Method indicates a SOS ( Sign of Strength) TR above the previous TR , BU ( Backing Up Action) and LPS/ Multiple LPS.
In this stock's case after the SOS rally the volumes cooled off with slide in price we mark the last swing ended as ST=UT because it wasn't a SOS because the price failed to sustain above the TR and came back in the TR , the market proxy faced huge volatility and made a new low from it's previous levels with big spreads but the underlying stock didn't made a new low thus forming a Higher High - Higher low formation showing relative strength even though it closed -9% and the price is now rising with lower spread and volumes, thus we mark the low as LPS.
We make a uptrend channel by connecting two lows and the high.
Conclusion :
Scenario # 1 : The stock still seems to be in PHASE D also trying to cross above 200 Dema and 100 Dema if it shows SOS above 336 we can expect PHASE E (Markup PHASE), CHoCH and we can start a bull campaign and further add positions with trailing stoploss on LPS/Channel/DEMA.
Scenario # 2 : If the price breaks Channel we can expect that the stock needs to spend more time in TR.
Scenario # 3 : If the price also breaks LPS then the TR can be extended way further or can be concluded as a Distribution PHASE .
Trade active:
-----------------------UPDATE-------------------------------
looks like scenario # 1 in place with a SOS bar (High Spread + Biggest Volume bar yet since IPO ) now if the price should sustainn above the TR levels of 336 and consolidate in the range of 380-340 will validate Back- Up Action and SOS and will mark the end of Phase D when the price moves above 380 as breakout , Phase E will begin as Markup.
Stoploss : Current = 320 / 326 = 100 DEMA
looks like scenario # 1 in place with a SOS bar (High Spread + Biggest Volume bar yet since IPO ) now if the price should sustainn above the TR levels of 336 and consolidate in the range of 380-340 will validate Back- Up Action and SOS and will mark the end of Phase D when the price moves above 380 as breakout , Phase E will begin as Markup.
Stoploss : Current = 320 / 326 = 100 DEMA
Trade closed: target reached