vizzie said:
Hi Amitda !!
Nelco is lookin gud.. has taken a beatin today though...
but it is smwhat a risky counter.. on circuits many a time..
But yes gud consolidation it has undergone at current levels..
Also, Taj GVK hotels looks gud for an upmove frm here..
pls do hv a look when u find time..
N yes Amitda, do post the solution to that congestion query I asked u bout.. remmeber IDBI at 95 levels..
Lookin forward to ur reply on that..
cheers
vizzie
Hi Vizzie, a big gapup on Nelco spoilt the party today and closing very near the day's close wasn't a good sight.
You'll notice this kind of a wide range bar (the range between day's high and low) would normally appear at the end of a trend, or at the end of the current leg of a bigger trend. It indicates a temporary topping of the trend where a gapup opening is attempted, doesn't find buyers, the price tests a deep low and closes somewhere there. It doesn't matter that the current bar's low is higher than the low of the previous bar.
Now, what is different here is that Nelco is not in a trending mode but has been sideways since end Dec. So price exhaustion is not an issue here.
Now look at the previous bar. It's also a long range bar, high being 158 and low 145. Open was 152, and close was 158. This was a bullish bar where after opening at 152, the price was driven down to 145, but regaind ground to close right at the day's high. The bulls won the day. This is also the highest since mid Feb.
So the gapup today was likely on account of an attempt at raising the price higher after the previous bullish bar, but it was a high gapup throwing the players into confusion, the volume didn't come in to support the gapup, and finally the gap of even the previous bullish bar got all but filled today: The bar before that bullish bar had closed at 150 off, exactly the same as today.
Possibly the buyers are not yet convinced to pay higher, and the price may drift along sideways for longer. On the other hand the gapup may also indicate an increase in volatility after the recent sedate movement and the price action over the next few days should be watched. A close above 156-161 (see weekly chart) are to be watched before assessing an entry.
TajGVK looks really good with 152 and 158 being the levels to take out from cmp 147.
Will come back with the congestion query soon Vizzie!
Kind of late now.
Cheers.
