TCI BROKE OUT FROM A 30-WEEK CUP WITH HANDLE ON HUGE VOLUMETCI (Transport corp. of India) has just broken-out from an O’Neil Cup & Handle pattern on weekly chart, on over 3 times average volume.
The pattern meets O’Neil requirements as:
(1) there was a 2-year rally (Dec’22 to Dec’24) of over 100%,
(2) with substantial increase in volume (over 3 to 7 times) at some points prior to the pattern,
(3) pattern length of 30 weeks,
(4) pattern depth of 33%.
(5) During the period NIFTY corrected by 17%, & CNX 500 by 20%. Thus,
(6) the correction of 33% for TCI is well within the 2.5 times general market correction (as detailed by O’Neil).
(7) The Handle is formed in the upper half of the pattern (as per prescription), between 50% & 75% of the pattern range,
(8) volume in the Handle area is substantially low. Also,
(9) the Handle is formed on the support of 10-week (50-day) Moving Average,
(10) with Handle depth of 8.5%.
(11) The BUY Point (‘Pivot Point’ or ‘Line of Least Resistance’ as per Livermore) is 1197.2, the High of the Handle.
(12) on the Breakout Day it recorded a volume of over 12 times its 50-day average.
Coming to fundamentals, TCI has growing revenues over the last 8 quarters, & last 4 years. Also, it has growing EPS 7 out of the last 8 quarters (Dec’23 quarter was flat), & over the last 5 years.
It has 143 institutions (Funds) (increased by 3% in the last quarter) invested in 119 lakh shares (out of 238 lakhs free float) in the company.
Further health of Fundamentals of the company may be looked into as desired.
Currently, the stock is trading about 3.6% from the breakout level.
The overall picture indicates the stock has good fundamentals and strong technical strength.
DISCLAIMER: This publication is purely a personal analysis and is meant to be for informational and educational purposes. It is not intended to be any advice, suggestion, or inducement to buy, sell, or hold any stock, or any other financial instrument. Please conduct your own research and consult your financial advisor for any decision to buy, sell, hold, or otherwise deal with financial instruments, as they are prone to substantial financial risks.
