Bharti - Revisited - 06 Jun 2009

In an earlier post almost a week ago, I suggested for aggressive traders to buy Bharti between 750 and 820 with a stop loss at 720, and for conservative traders to buy above 875.

One more week has passed. From the chart at the left, it appears that while the uptrend is still intact, the upward momentum has stalled somewhat. And Bharti may have entered an intermediate consolidation phase in which it may simply oscillate between 750 and 850.

At this point, I do not recommend adding any long position in Bharti. It is far better to wait for Bharti to come out of the consolidation phase before taking a position.

For long positions already held, the choice is to either hold the position with a revised Stop Loss of 750, or to liquidate the position and get into cash. Individuals can make their own decision, depending on their own overall cash position etc.

The uptrend in Bharti will be confirmed if Bharti closes on a daily basis above 875, Conservative traders can take long position at that point.

If on the other hand, Bharti closes below 750 on two consecutive days, it is likely to enter a near teem downtrend. In such a scenario, aggressive traders can sell Bharti below 750 with a Stop Loss above 815 for likely targets of 710, 660 and 620.

Disclaimer: The above analysis is just that - my analysis. If you choose to trade on the basis of this analysis, you will be solely responsible for the outcome of the trade - profit or loss. Please keep in mind that day trading is not for the novice and there is significant risk of loss of capital in trading.

Stock of the Week - Bharti - Revisited 20 Jun 2009

In my previous posting on Bharti in this blog, I mentioned that "Bharti may have entered an intermediate consolidation phase in which it may simply oscillate between 750 and 850."

Subsequent price action in the last two weeks has played out the above scenario. The highest point price Bharti has touched is 866 and the lowest 786. The last five days have seen vary narrow price movements filled with dojis ( meaning the opening and closing prices are almost the same) and inside days.

This shows indecision. And as I mentioned in my post yesterday, "One of the guiding principles (of trading) is when things are not clear - stand aside until the market reveals its hands."

This brings us to a question - what will be the indications that the market has decisively moved as far as Bharti is concerned?

A study of the chart shows that support and resistance of the recent price actions are 870 and 750. Therefore it opens the following trading opportunities.

1. Wait for breakout above 870: Go long if bharti closes above 875-900 for two consecutive days with SL at 750 and target 1000 - 1050.

2. Wait for breakdown below 750: Go short if Bharti closed below 750 for two consecutive days with SL above 850 and targets of 710, 660 and 620.

3. Trade between 750 and 850: In other words, sell at 850 with 875 as SL and 780 as target OR buy at 780 with 750 as SL and 850 as target.

The options 1 and 2 are more conservative than option number 3.

If you have any comments please write to me at stockmarket.methods.in.madness@gmail.com

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Disclaimer: The above analysis is just that - my analysis. If you choose to trade on the basis of this analysis, you will be solely responsible for the outcome of the trade - profit or loss. Please keep in mind that trading and in particular day trading is not for the novice and there is significant risk of loss of capital in trading.

Bharti - A Technical Look - 31 May 2009

The week that has just gone by saw a lot of news flow regarding Bharti Enterprises - particularly the renewed Bharti MTN deal. Many analysts - the fundamental analysts in particular - were preoccupied with unraveling many complex aspects of the deal such as the the financial aspect, the regulatory aspect etc.

Let us instead look at the daily price action. See the chart of Bharti (you can click on the chart to get a larger view which will be shown in a new window) . Since the news broke, the market reacted negatively for three days, and then pulled itself up in the next two days ( these two days were also days when the market went up a lot). Now the thing to notice is that the script has bounced off its support at 750 and is now poised to break through the green rectangle.

It is clear that the trend has been up. So, we accept that the trend is up and treat the most recent price action as a correction. Therefore we should look and get ready for a buy set up. This view is supported by the slow stochastic about to come out above 20 and the RSI beginning to stay above 50. Here are some specific suggestions:


1. For Aggressive traders: buy between 820 and 750, with SL at 720.

2. For Traders with moderate risk appetite: buy when Bharti closes above 875 on a daily closing basis. SL at 750.

Once the trade is taken, trailing stop loss should be employed to protect gains if and when the trade becomes profitable.