One stock that has refused to participate in the Bull market with enthusiasm: Bharti
Here's the Bharti stock daily chart
As you can see in the chart above: Bharti stock has made a nice progress from lows of 280 in March to current levels of 360-370 but the entire move has lacked momentum and energy.
The History of well defined resistance
Bharti has struggled to cross 360-370 since Feb 2012 and hence the move to 360-370 was just a move towards the resistance. It was only when stock crossed 360-370 in early August that bulls got excited but see what happened after that. The stock has failed to sustain at higher levels and sold off.
At current levels, stock looks vulnerable and there is high possibility of one more wave of selling before stock can make a fresh breakout move. Be cautious for any selling below 361 because that can cause some short term supply pressure. There is a high possibility that we may see a sell off below 361 and then stock does a U turn, as it happens in Bull market.
How should one play it?
One can buy with hope that 361 will hold. Exit if stock closes below 361, and then wait for visible U turn before entering again. The reason one should exit on close before 361 because you never know what might happen below 361. Stock can just see more sell off and so better be safe than sorry.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers