There are times when stock does everything right but results in pain, frustration and no real gains for investors. That's the story of Just Dial stock.
Just Dial has behaved like Bear market stock since Jan 2014. Here's Just Dial daily chart
The above chart looks depressing and stock seems to have registered a waterfall kind of decline in an environment where large number of stocks have rallied like crazy
What's the context: Lots of times, when a stock runs ahead of itself, then it becomes the reason for under performance for long period of time. That seems to have happened with Just Dial stock. If we look at the stock over longer time frame on weekly chart - the stock makes lot of sense.
Here's the weekly chart
As you can see in the chart above: Just Dial made an impressive bull run from 600 to 1700-1800 in 2013 and since then has made effort to build base at 1060. Today's sharp rally from lows to ensure good closing above 1060 on weekly chart reinforces the belief that base building is for real.
The base building has a purpose. It gives time to fundamentals/earnings to catch up and make stock attractive once again for spectacular take off. Technically Just Dial is doing all the right things...but what needs to be seen when the wait will end and stock will start performing again. There comes a time when even people with tons of patience give up on the stock. Any decline below 1000 on closing basis would lead to large scale liquidation. But as of now - Just Dial appears attractive at 1060 and seems to be doing the right thing
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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