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Eicher Motors: The stock that 'never' falls- A 'Reality' Check

By Traders ChowkcallsStock MarketsJan 08, 2019 09:48
in.investing.com/analysis/eicher-motors-the-stock-that-never-falls-a-reality-check-200206976
Eicher Motors: The stock that 'never' falls- A 'Reality' Check
By Traders Chowkcalls   |  Jan 08, 2019 09:48
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Among Auto Stocks, Eicher Motors (NS:EICH) is one stock that has multiplied investors' wealth at an amazing rate over the months and years! It has witnessed an unbelievable journey from 3,000 to 32,000 in the period of 2013-2018 and has garnered a return of 900% in just 5 years time period.

Not only Investors' favourite it has also been in traders kitty for a long time. However, in the last few trading sessions, the stock has taken a hit and has been tumbling to lower levels.

In the following post, I will be throwing light on Present Chart scenario of the stock and how traders shall be positioned now in this stock.

Technical View

If we take a zoom out look at Monthly Charts of Eicher Motors, there is a break from the up trendline indicating a change in underlying sentiment. Along with the trendline break, the charts also display a Double Top Pattern

Eicher Motors Monthly Chart
Eicher Motors Monthly Chart
.

Double Top is a Bearish Reversal pattern which indicates the reluctance of the market participants to pay higher prices for the stock. The peak/resistance for this pattern stands at 31,900 and the base is at 26,800. The stock has already authenticated this pattern as it has given a confirmed break down from the base.

As we take a closer look on Daily charts, there is again a Bearish setup. The stock has witnessed a sharp sell-off accompanied with high volumes at 27,000 levels and there is a Descending Triangle in the said time frame.

Eicher Motors Daily Chart
Eicher Motors Daily Chart

The base of the pattern rests at 21,000 levels and the stock already breached this mark on 3rd January. It is also trading well below the support of 150, 50, 20 and 10 DEMA indicating a strong selling pressure in the stock.

What Indicators say?

Trend following Indicator, MACD is displaying a Sell crossover suggesting that short and medium term trend may remain subdued. The strong bearish trend is also supported by a rise in ADX, which indicate that the fall is a bearish trend with a strong force.

Conclusion

My outlook for the stock for Short /medium term is 'Negative' and the stock may witness lower levels in coming days. Traders, if positioned, may initiate fresh shorts below the immediate support of 19,750/-

Original post

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Eicher Motors: The stock that 'never' falls- A 'Reality' Check
 
Eicher Motors: The stock that 'never' falls- A 'Reality' Check

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Najir Bilagi
Najir Bilagi Jan 13, 2019 12:56
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very good review...
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Sumeit Shukla
Sumeit Shukla Jan 11, 2019 17:50
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not agree ...
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Muthu Pandian
Muthu Pandian Jan 08, 2019 16:56
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not agree
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Ramesh Gorrila
Ramesh Gorrila Jan 08, 2019 16:28
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