Saturday, September 19, 2009

Trading Review: Reiterate Buy on IDFC at Close Above Rs.147/- Mark


Short-term Trading Call: A Buy Call on IDFC is Reiterated if it manages to Close above Rs.147/- mark. A bullish Mat Hold indicator & an Ascending Triangle Pattern emerging on the IDFC Daily charts point towards a Bullish breakout once the stock settles above Rs.147 on Closing basis.

Charts Courtesy: www.icharts.in



Reference: IDFC Buy Call on this blog on September 14, 2009

The stock has Consolidated for about 5 days since a Trading Buy call was initiated on this blog on Sept 14. However, during this consolidation phase of last 5 days, a unique pattern of bullish Mat Hold indicator seems to have emerged on the Daily charts of IDFC.


Mat Hold Indicator: (Refer Blue Rectangle in Above Chart)


Investopedia.com defines Mat Hold Pattern as, "A pattern found in the technical analysis of stocks that ultimately indicates the stock will continue its previous directional trend (bullish or bearish). The pattern is initially indicated by a significant trading day in one direction or another, followed by three small opposite trending days. The fifth day then continues the first day's trend, pushing higher or lower, in the same direction as the first day's movement."


The Mat Hold Pattern of Candle stick charts is characterized by 5 day pattern with Signs of Consoldiation & then a Reversal, which can be described as below:


Day 1: The First day is marked by a long white candle (Up day) where the Closing of the day is way above the opening of the day, in effect, creating a long Real Body (with or without shadows).

Day 2: The Second day is characterized by a gap-up opening. However, the second day closes below the Opening price, in effect, creating a Red candle (as shown in above charts) with relatively small Real body as compared to that of the First day.

Day 3 and 4: Similarly, the 3rd and the 4th days are characterized by closes that are slightly below their respective opening for the day, in effect, creating another 2 Red candles with small Real body as compared to that of the First day. However, a common typical feature that reflects on Day 3 and 4 signifies a brief period of down trend but within the range of the stock price movement which is recorded on Day1.

Day 5: The Fifth day is characterized by a bullish formation of long white candle either engulfing the coverage of price movement of last 3 days or a Close above the closing levels recorded on the 1st Day of long white candle.

Apart from bullish Mat hold Pattern, an Ascending Triangle Pattern is also visible as pointed out by two trend lines on the chart attached above. The Resistance line of the ascending triangle is placed around Rs.147 mark.


CONCLUSION

With Reference to the above mentioned chart patterns for IDFC viz., Mat hold indicator & Ascending triangle pattern, it is advisable to track both chart indicators in sync with each other. Meaning to say, that the ascending triangle pattern has a resistance of Rs.147 & a bullish confirmation of the Mat hold pattern can be gauged with one more positive white candle stick which closes above Rs.147 mark. Tracking above evidences of bullish formation, a Buy call is Reiterated once the stock closes above Rs.147 resistance level.


Option for Traders

Traders who Already Bought IDFC based on Sept 14 Buy Call
Traders who have already invested money @Rs.142-145 zone based on the Buy call dated Sept 14, can add-on to to their investments as & when a bullish confirmation comes above Rs.147 mark. Traders with Low risk appetite can remain invested in the stock if they do not wish to add-on. The Stop loss for the trade remains at Rs.136/- on Closing basis.

Traders who have still not Bought IDFC based on Sept 14 Buy Call
Traders who did not buy the stock based on Sept 14 call, can jump-in to this counter, only on the cross-over & close above Rs.147 where we get a bullish confirmation. However, they can avoid/skip this Trading Call until the stock crosses crucial resistance zone of Rs.147.

Note: The above views on IDFC are simply based on visibility of 'Likely' patterns on charts to the best of my knowledge. The grounds on which the patterns are predicted may go wrong or haywire depending upon the market movement or actual demand-supply scenario prevailing in the counter. Traders should act on the above calls solely based on their own Responsibility & confirmation of the above views from their trust-worthy sources. The above views are only for educational & guidance purposes.

Status Of Past Trading Calls:

1) Ranbaxy Call Full Target Achieved
2) Orchid Chemicals Both Targets Achieved
3) Aban Offshore Stop Loss Triggered

(High Risk Traders can again Buy Aban Offshore below Rs.1600 with SL of Rs.1496, a Bullish Engulfing pattern followed by positive confirmation during next two sessions, affirms the positive uptrend in the counter)


Disclaimer: All data, content and/or reports posted by Viral Rajnikant Dholakia on this site are only for information and educational purpose of visitor/readers of this blog. It does not constitute to be a recommendation/offer/advice to buy or sell assets/securities in any form. Individuals/organizations are requested to take an informed call by consulting their Financial Advisor before acting on any matter/data published on this blog. This blog does not warrant of any kind of accuracy, adequacy and completeness of data, ideas or thoughts published in it. This site and Viral Rajnikant Dholakia assumes no responsibility or liability or loss or damage of any kind/nature for your trading and investment decisions and its consequent results.

10 comments:

Shabu's said...

Superb again Viral,

You are doing excellent analysis with charts. I have positioned a bit and will as per ur suggestion.
Will you publish few posts on general chart analysis techniques.

Regards
Shabu

Viral Rajnikant Dholakia said...

Thanks Shabu,

Actually, i could have posted on general chart determination techniques... But, most of it are available readily on various websites.

You can google for 'candle stick' chart patterns to find various sites serving the purpose of chart learning.

However, what matters is Application of these chart patterns for the stocks you wish to take position in & take a stand on the stocks based on the analysis.

Viral Rajnikant Dholakia said...

Thondaiman has posted a comment in one of the earlier posting w.r.t. United Phosphorus call as follows:

Thondaiman said...
Dear Viral,

Your united phosphorus call is still open. It has not broken its support or resistance. Hence I am planing to take position in this scrip on Tuesday. Please let me know in case you have opinion against it. Thank you.


My Reply: Stay away from that call as of now. The basis on which that call was made related to Triangluar Patterns, did not fructify. The Triangular pattern went on stretching, and hence not appropriate to take the call.

Ideally, the breakout from the triangular pattern should occur within the 2/3rd of the width of the Triangle. Pls Avoid the call as of now.

Thank you for reminding me about the status of the United Phosphorus call.

DARK KNIGHT ABHAY said...

Happy dussera 2 one and all...!!!!

May d gud rise over d evil...

Abhay

Suzie said...

idfc not moving????????????? stop loss likely to trigger.If technical analysis was so easy,everyone would have made money.Technical analysis is just as good as you want the data to be interpreted.

Anonymous said...

IDFC jumped......... your technical knowledge is rocking.......

Amar

DARK KNIGHT ABHAY said...

i agree wid Anonymous...

i have videocon at 242 and idfc at 143.
i bought on purely trading concern.
what's ur targets 4 dem ?

thanks
abhay

Viral Rajnikant Dholakia said...

Dear Dark Knight Abhay,

Videocon Industries

Videocon was recommended on this blog at Rs.220-225 (But, you seem to have bought @242 as per your comment) with Targets of Rs.245, Rs.260 & Rs.275.

Videocon target 1 @Rs.245 is already Achieved long time back. However, Target 2 and 3 are expected to be achieved in coming times, if over-all markets remain supportive. Dont be surprised if this stock goes past Triple Century (Rs.300) ... but as of now we should play for realistic targets. We can review the situation later.

You can maintain a Stop Loss of Rs.228/- for your holding.

IDFC

IDFC call was given on this blog at Rs.142-145 with a Targets of Rs.155 and Rs.170. The Stop Loss for the same remains at Rs.136/-

The stock is expected to show strength until it sustains above Rs.150 zone. Once the stock crosses Rs.160 levels, the stock is expected to touch Rs.170-180 over some time.

Basically, these are Short-term calls without any time horizon (say 10-30 days).

The time factor may change depending on market conditions. Traders are requested to observe strict Stop Losses and partial booking of Profits at every step of Targets (T1, T2, etc) to manage their trades.

DARK KNIGHT ABHAY said...

thanks 4 u r reply..!

Shabu's said...

Dear Viral,

I can say based on my experience more than a decade with the market, You are doing a very rare, intellectual, data supported and above all an unparrallel job. I am watching your blog since its started and amazed on your certain picks and its returns.

I would like to request you that take the negatives also as a part of this hobby. People who makes good money will never perk you, but if they lost, will definitly make loathsome comment. I can assure you that the person who put a depraved comment above is in the category.

Thanks and regards
Keep morale high