Short term buy signal, could it be an early opportunity?

Published November 20, 2018

The market showed a small gain Monday, and Nifty 50 (NIFTY) ended the day at 10763 points, which is an increase of 0.76 per cent.

764 shares showed a gain and 724 showed a loss. 75 shares were unchanged and closed at the same price as the previous day. There was no trading in 241 shares.

The value of the total volume of shares and primary capital certificates traded Monday was approximately 269.6 billion rupees.

Investtech's  short term Hausse index stands at 56, an appreciation of 1 point over a week. The Hausse Index varies between 0 and 100 and a value above 50 suggests that more investors are optimistic about the market at the present moment.

So we can take a positive clue from this and see the short term chart of HDIL, which has recently given a price breakout.

Housing Development an (HDIL.NS) Close: 22.15

Since making a high of 69.15 early this year, the stock corrected over 75 per cent before stabilizing around the lows of 18 rupees.

The stock price has consolidated in the past two months and has given a buy signal from a small double bottom formation. The price target from the formation is around 23.75, but the bullish formation suggests further price rise and the price may rise to the next resistance level at 34.60 rupees. In case of a downside reaction, stop loss is to be maintained if price closes and continues below last pivot at 18.75.

The volume balance, as indicated by the up green arrows in the bottom right corner of the chart, and momentum indicators are positive and strengthen the stock in the short term. The stock is overall assessed as technically positive for the short term.

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

The analyses are based on closing price as per November 19, 2018. Maintaining proper stop loss is always recommended.