While scanning for trading opportunities, chart of Radico Khaitan, a distillery stock caught my attention. From the initial glance, it has formed nice base and beginning to reverse its longer term downtrend. Lets take a closer look to see if this stock is brewing the reversal.
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| Radico Khaitan Monthly Technicals |
- Radico was at 400 in 2006, then lost its great run and came down to 60. From there it has been forming base for last 4 years.
- It has been closely flirting with 30 week moving average.
- It is very close to two long term trendlines, one sitting at 126 and then another at 155. If it manages to close above both of these in coming weeks, it'll be good positive action confirming the reversal.
Lets zoom in to the daily chart.
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| Radico Khaitan Reversal on Daily Charts |
- Daily chart confirms the recent uptrend after forming base from 90 to 100.
- From 100, a rapid up move followed by 3 week tight flag consolidation is visible.
- It has broken out of flag yesterday with increasing volume. In the process, it crossed 150 day and 200 day moving average.
- The target for flag pattern comes to 138.
Overall, the chart looks very positive. If buy trade is taken at 126, with stop loss at 115, it offers favorable risk reward ratio. Since 126 to 155 is the zone of convergence of multiple trend lines, the journey upwards could be turbulent. Cheers!
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| Various Liquor Brands |
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