HEG trade ideas
HEG Limited Get Ready for Profit Booking
Below Messege from HEG
The trading window for the purpose of trading in the shares of the Company by its designated persons shall remain closed from October 1, 2021 till 48 (Forty Eight) hours after the announcement of Financial Results for the quarter & half year
ending September 30, 2021
HEG Long-TermOVERVIEW . . .
HEG Ltd, a premier company of the LNJ Bhilwara group, is today India’s leading graphite electrode manufacturer. It has one of the largest integrated Graphite Electrode plants in the world, processing sophisticated UHP (Ultra High Power) Electrodes.
The company exports over 70% of its production to more than 30 countries of the world.
Expertise in: Graphite Electrodes, Power Division, Carbon Specialty.
Fundamentals
• Positive:
o Revenue up by 7% to 435.75 Cr. (Qtr. Ended 30-06-21)
o Net profit 56.77 Cr. from (16.08) *. (Qtr. Ended 30-06-21)
o Free cash Flow: 427.37 Cr. (YOY).
o FII Holding increased by 1.84% (Qtr. Ended 30-06-21)
o Zero promoter pledge.
o Debt free Co.
• Negative:
o MFs Dec. stake in last quarter.
o High PE with 0ve ROE
o Declining Net cash flow (YOY)
CONCLUSION: Due to lockdown manufacturing had been stopped and results Dec. in growth (YOY). But in current qtr. Co. has been showed strength by making profits (Turnaround from Loss to PROFIT(QOQ)*. Also has potential to perform well in coming quarters.
TECHNICALS . . .
Prior Trend: With the break of support at 3568 , it appeared that a downtrend had begun. Even though the decline was not that sharp, the new reaction low represented a 52-week low. HEG was clearly not in an uptrend .
Decline: The stock declined from 4562 to a low of 519 and a pair of hammers formed in (23 Mar - 30 Mar) to mark the end of the decline.
Low: Prior to the hammers, the stock traded around (range: 1216 - 451) for the previous 8 months. When the gap up with high volume followed the hammers, it appeared that a low had been formed. After a short rally, there was another test of the low and a higher low formed at 725 on 1st june'2020 .
Advance: From the third low on 2nd Nov.'2020 at 658, the advance began in earnest and volume started to increase. And, finally HEG makes Higher Lows with HUGE VOLUMNE SPIKES.
Now, currently , consolidating b/w the Range (2408 - 2000).
ACCUMULATION WITH PRICE ACTION AND VOLUME PROFILE Disclaimer-:
1. FOR WHOM VOLUME PROFILE AND MY METHOD IS A LITTLE NEW OR BLURRY . I WILL SOON PUT UP AN EDUCATIONAL POST WITH DETAILS AND EXAMPLES. WE CAN HAVE A SERIES OF DISCUSSIONS THERE TOO. DO FOLLOW MY ACCOUNT TO GET NOTIFIED.
2. Do ask your questions in the comments if any.
VOLUME-PROFILE-:
Can be used to identify potential accumulation or distribution regions. If the volume of opposite trend is low then we will face less barrier to our current trend.
POC-: Point of Control- The red line is where the maximum volume is accumulated.
OBSERVATIONS-:
Stock fell in a drastic downtrend, formed a narrow wedge->broke out and then uptrend started.
While the uptrend several accumulations have happened. Current region is also an accumulation, but a breakout will confirm.
The volume above 2500 level is very low which means we will face weak resistance so there is a high chance the stock will rise to the levels of 4900- all time high.
ENTRY-:
2512 confirmatory breakout
STOP-LOSS-:
1948 is the support of the recent consolidation
EXIT
Sometimes we have to exit before target is reached if there is bearishness. Following can be the clues of bearishness-:
1. If there is bearish candlestick pattern in 1D timeframe, stop-loss can be trailed to a nearby support level .(Like Candle Low)
2. If there is RSI Divergence in 1D timeframe, better to exit at close of 1D since afterwards there can be long consolidation or reversal.
3. If the trailing stop-loss is hit, please exit
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**I WILL POST NECESSARY , SIGNIFICANT CHANGES IN THIS THREAD LIKE ADDITION TO POSITION, EXIT SIGNALS, BREAKOUT ETC.
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NSE:HEG
