BIG BANG BREAKOUT SUCESS: FINOLEX INDUSTRIES

Technical Analysis is a great tool to identify investment opportunities and here’s one good example: Finolex Industries. I wrote a bullish note on the stock on Jan 21 2013 when stock price was Rs. 71. A year later, the stock is at 166 – up 133%.
 WE RECOMMENDED THIS STOCK ON JAN  2013 TO OUR CLIENTS

The stock made a big momentum surge above 200 dma today by rallying from 62 to 71. Well, this marks the beginning of new momentum cycle. Many of you may think – its too late to enter after a 15% surge – well think this way – What has stock done in last six months even after today’s rally? Nothing – it’s just trading at the higher end of the band. Such kind of momentum action generally marks the beginning of the move and not the end of the move. The bullishness also stems from the fact then when stocks surge after long consolidation – they usually surprise on the upside.

Here’s how Finolex Ind chart has behaved in last one year:

 

The stock is up 133% from the price I first covered the stock. Is the stock done with this bullish move? Nope. One should patiently wait for pullback and look to add more near 130-140. The stock is a HOLD as long as it trades above 50 week moving average which as of today stands at 119.
The case study is an excellent example of how Technical Analysis can be used as great tool for investment decision. We hope you enjoyed reading this article