Whenever stock makes an impressive move - traders ask the question: Is this for real or just a sucker move? Let us review Tata Chemicals chart from this perspective
Here's Tata Chemicals stock Daily Chart
As you can see in the chart above: Tata Chemicals stock made a gap-up move above 50 dma/ levels of 430 on July 01 2015. The stock then pulled back..retested 50 dma as support and then rallied to 520 by July 22 2015. The stock post that move went into corrective phase and is now down to 50 dma.
If the Bullish momentum move in July from 430 to 520 levels was for real, then ideally stock should find support here around 450/50 dma. Any decline below 437 will weaken the case of Bullish momentum and stock will have to work hard again to regain the trust of bullish traders. The 200 dma of the stock is at 440
Having said all of the above: right now the market risk is very high and has the potential to damage any chart right now
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1. 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.
2. I am not a registered investment advisor. My views are strictly based on my understanding of chart. Please always do your own due diligence before making any investment/trade.