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Fibonacci

Technical Analysis: For AnticipationThe very basic foundation of technical analysis is 'anticipation'. The anticipation could be based upon historical facts or data. On the basis of assumptions drawn from the historical data we can predict the future course of action, or at least try to do so. The anticipation, however, could go wrong if data is not backtested. The anticipations based upon properly backtested data can result in to high probability opportunities. I would let the discussion open for the readers and get on to the Nifty charts. The current Situation: In previous posts I mentioned that the 9950-10050 zone may act as a strong support. Nifty bounced right from 10004.55 and has been trending higher since then. Last week it had a dip below the 10440 swing, but buyer managed to hold the pullback and pushed Nifty back to 10800. We all know how impulsive this rally was. Due to this impulsive nature I expect continuation, perhaps up to 11090 -- the fib. level which also retests the blue trend line. We may face reaction from those levels. If we manage to continue higher this week, most of the bears trapped below 10440 will get stopped out above 10840 or 10950, resulting into high level of volatility. Head and Shoulders Scenario: At present this scenario is purely hypothetical. It suggests that we are in a right shoulder phase. The HnS will get a tentative confirmation below 10333 bear trap low and will be confirmed (as most of you must be knowing) below the neckline. In that case, I would expect a deeper bear market and will re-analyse for bear targets. This scenario will have fewer chances to fructify if we see closings above 11100. In that case, I would call it the possible end of bear phase. I hope it makes sense to most of the readers. Do hit like for better posts in future. Regards Bravetotrade
NSE:NIFTYEducation
by Bravetotrade
4
JOURNEY OF TATA MOTORS - WHY JAGUAR CO IS DOING A NANO?If any company shares weak, the chart tells you! Tata motors have been investor’s favorite stock since ages but have continued to disappoint with its performance over the past 2 years. The share touched 600 in the Sep 2016 and has been in a continuous downtrend since then. Now here arises 2 questions : 1. Why is it investor’s favourite share? 2. Why it has been disappointing? The answer to the first question is - Probably because it belongs to the reputed Tata Group. The brand Tata is enough to attract investors. (I personally find only that reason) Now the second questions have a lot of answer. The problem of Tata Motors lies with its British subsidiary and Jaguar Land Rover Ltd (JLR), which accounts for 70-75% of sales of Tata Motors. The performance of JLR has been an area of concern in the past 2 years. Please note down some of the reasons for downfall : 1. Fall in growth Rate - Monthly sales numbers of JLR have fallen from double-digit growth until FY16, to low single-digits for most months since September 2016. In December 17 quarter results showed a year-on-year drop in sales volumes in the three large markets—the UK, Europe and North America—that account for a little over half of JLR’s total sales. 2. BREXIT – JLR exports 80% of its cars worth 18 billion pounds annually. Brexit has resulted in a major blow to Pound resulting in huge impact on TATA motors profit. Tata Motors-owned Jaguar Land Rover even issued statement that BRexit could hit the Britain's biggest carmaker's annual profits by over 1.2 billion pounds and may even force an exit from the UK. 3. Rakesh Junjunwala losing interest - We tend to follow the top traders and when someone as big as RJ sold around 5 million of shares of TATA Motors, a lot of investors started losing confidence and faith in TAMO. 4. BS III Inventory - TATA motors have around 25000 crores of BS III Inventory. They were not able to sell it before the deadline. This makes us very suspicious about performance. Even after offering lurucative discounts why they were not able to clear stock? Was no one ready to purchase it or their was an operational delay and thus a failure. 5. Domestic Business- With some new launches TATA is trying to compete in a market which is highly competitive, and Maruti has more than 50% share. They may require a product which is far better than existing and at a far lower price point. May take a couple of years. TECHNICAL Even speaking technically share has been forming Lower Highs and Lower Lows since the beginning of 2018. So charts were clearly depicting a downtrend. Also it followed a downward sloping channel. At times the upper channel acted as a resistance and other time the Fibonacci resistances stopped the share from going up. In August the Share broken the upper channel but was resisted at 38.2% Fibo Level. The share even here failed to cross the prior high and started falling. Thereby making a Lower High 3. Untill the operational / fundamental issues of Tata Motors get resolved, it would be really not look like a portfolio share for me. Further from the technical front, the share is trending on the lower channel and it has bounced 4 times from here and we can expect some similar bounce from here. Thanks, I hope this is Helpful. Keep sharing the list of shares you want an analysis on. Thanks :) PS : All views welcomed if they intend a fruitful discussion. And If Warren Buffet says he still learns, who are we to say or believe that we know all. Lets learn together and Earn together. #JOURNEYOFATRADE
NSE:TATAMOTORSEducation
by prathamaggarwal
15