Here's the journey of TCS stock over last 8-9 years
TCS sold off from 690 in 2007 - a year before the 2008 crisis and tumbled below 250 during 2008-2009 period. But then stock started a strong recovery and was back to 690 by Nov 2009.
TCS stock broke out in Dec 2009 above 690
The stock post breakout consolidated for 5 months just above the breakout point and then started a strong bullish journey where it moved up 4x from 700 to 2800 between May 2010 and Oct 2014. It was a mind-boggling move for a large cap stock
When stocks rally like this, they do run up ahead of earnings. There comes a time where stocks do run out of fuel and energy.
But the end of rally does not mean that stock has made a top. Remember when stocks are in a Long-term Bull market, they are like on a journey to the top of the mountain with peaks unknown. The stocks run up and then they construct bullish camp where they take rest before resuming bullish journey again.
TCS BULLISH CAMP
TCS after running to 2800 has not collapsed. The stock has started trading sideways giving the opportunity to earnings and moving average to catch up. The stock has developed a comfortable trading range between 2350 and 2800 and as long as stock trades between the two levels, there will be lower trading interest. It's only when a stock breaks out from this zone then only people will make a judgment call on the future of the stock.
This is how TCS Long term Chart looks like as of now
The big lesson:
- There is nothing called TOP in the market.
- The stock can continue to run much longer than one can imagine.
Do let me know your comment on the above story. One of the objectives of writing this post is to tell the journey of stock with the help of charts
1. V-Book: Science of Stock Price Action
2. Case Study: Which trading rule helped Zee Telefilms deliver 40% returns in 2015?
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