Buy signal in this one cannot be missed

Published November 15, 2018

While I am writing this report, Nifty 50 index is over the resistance of 10600 points. But this is not enough. It must close above this level to give us any hope that the short term scenario is turning positive.

Meanwhile we landed up on the Cummins India Limited chart. It may turn out to be a solid opportunity in the coming days or weeks.

Cummins India Limited (CUMMINSIND.NS) Close: 789.90

Cummins India Limited has broken the ceiling of the falling trend in the medium term. The stock has very recently given a breakout from a small double bottom formation and a bigger inverted head and shoulders formation which extends over nine months.

At the same time the stock is above its resistance of 780 rupees. A buy signal has been generated and the formation gives a price target of 936 rupees in the coming weeks or months.

Positive volume balance suggests that buyers are coming in with every price rise, while sellers are now getting hesitant to sell at lower price. Positive and rising momentum as indicated by high RSI value suggests that buy interest among investors is rising and the stock may continue to rise.

The stock has resistance around 845 levels, but if the price manages to close above that level, it may go up to our price formation target of 936 or more. In case of a reaction on the downside, there is support around 780 rupees.

Investtech's outlook (one to six months): Positive

Hausse Index

The Hausse indices are indicators of optimism. They show the ratio of investors who are positive in the market.

The above graph and table suggest that buy interest is rising and show optimism among investors in the short term. More investors are positive than last week.

More about the Hausse Index can be found here.

The analyses are based on closing price as per November 14, 2018. Maintaining proper stop loss is always recommended.