Few days back - I wrote a note on why one should never bet against Leadership. Here's another example: ITC
ITC stock sold off sharply on June 23. The reason that was given: Health Minister statement that Govt should bring in Higher Tobacco Tax in Budget. Well believe it or not - a day before budget - ITC has not only recovered from all the selling but also trading at levels last seen on May 30, interestingly the day Health Minister first made that statement.
ITC Weekly Chart
It's not as if Health Minister has taken back his demand. Just 3 days back: Union health minister Harsh Vardhan has written to all states to consider raising the value-added tax (VAT) on tobacco-made products to 50 percent. But it seems this made no impact on the stock.
Let me admit - I am totally shocked at this rally and never expected it 🙂
What's driving the rally?
- Leadership Nature of the stock
- Institutional Bullish Bias
As a matter of fact: Morgan Stanley came out with Buy report on the stock just 3 days after sell off on June 26 with a target price of 360-400.
The Blogpost is purely for educational purpose