Stock Forming Base After 31% Fall; Time for Bulls to Charge?
Aditya Birla Fashion and Retail Limited (NS: ADIA ) is an apparel business with a market capitalization of INR 23,645 crores, retailing brands such as Loius Philippe, SF Jeans, Allen Soley, Peter England, VanHeusen etc.
The share price of Aditya Birla Fashion and Retail has been a laggard for more than 3 months now as investors are only witnessing lower lows for the last many weeks. After making a top of INR 359.5 on 1 November 2022, the stock came under a firm bear grip which led it to fall drastically in a short span of time. This fall which was thought to have taken a breather at around INR 300 soon breached this level as selling resumed after mid-December 2022.
Image Description: Daily chart of Aditya Birla Fashion and Retail with volume bars at the bottom
Image Source: Investing.com
After falling to a low of INR 244.85 on 27 January 2023, losing a decent 31% from the all-time high, the stock turned sideways, curbing its downtrend. This is a healthy sign after a noticeable downtrend as it indicates an increasing demand from the lower levels which is strong enough to change the downtrend to a neutral one.
This price action is also called a base formation and its sets the stage for a successful recovery. This base building has been going on for more than 10 days now and the longer it takes to make this base, the better the chances of a reversal get. There is a resistance of around INR 260 which if crossed (on a closing basis) might end the downtrend and trigger a reversal. There have been two instances wherein the stock crossed this level but came down swiftly on the same day, hence a closing above INR 260 is preferred.
The volume during this base formation has also been increasing, which is a good sign and indicates some buying action. The 10-average volume on 25 January 2023 stood at 1.64 million shares which jumped 61% to 2.65 million by today’s closing. Again, the higher the volume one sees, the better it gets for the impending reversal.
Now, after clearing the hurdle, traders can expect a quick 10% rally toward INR 285. There is strong support present at INR 245, which if broken, can lead to the resumption of the downtrend.
Read More: Trendline Breakout: Bulls Keeping a Tab on This F&O Counter!
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.
Thanks for the views, plz. guide for bajaj finserve and apar industriesLike 0
Aayush, could you write a note on NDTV pleaseLike 0
Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb
Drop an image here or