HINDPETRO : REVERSAL FROM MULTI YEAR SUPPORT !!!

The stock has been under severe pain for the last many months and even years. The stock has been in a downtrend since Sept 2017. The stock registered an all-time high of 493 and thereafter stock saw sharp correction dragging stock price lower till 163 which was formed in Oct 2018.

Post printing low of 163, the stock has been trading sideways and consolidating in a wide range. From the last more than 2 years stocks have been in a range of 150-170 points i.e 165-330 levels. Every time stock hits the higher end of the range i.e 330, the bears take control over bulls and push the price lower towards the lower end of the range i.e 165.

The stock came under my scanner post stock again reversed taking support near lower end of the sideways range and started to form bullish candlestick patterns. 

From the attached chart it is evident how the stock has reversed taking support near the lower end of the sideways range. I believe if the stock manages to hold this support the stock has the potential to test the median line of the range (Red Dotted Line) in the short to medium term. 

Going forward if stock manages to hold and sustain above the median line then one can expect the price to continue to northward move towards the higher end of the range. 

The probability of holding support and price scaling higher seems higher. Near the support, there is a sharp rise in the volume bar and is greater from the last many weeks which is a bullish signal. As well momentum indicator has given positive crossover and inching higher from oversold territory. 

Now, lowering the time frame from weekly to daily chart. On the daily chart stock has registered breakout from Inverse Head & Shoulder pattern, a price pattern that is considered bullish reversal price pattern in nature. The breakout has accompanied by sizeable volumes which increases the reliability of the breakout. 

The stock formed a bullish candlestick pattern near support with a surge in volumes, a Positive signal from momentum indicator, and a Breakout from bullish reversal pattern in the lower time frame chart which hints and increases the probability of price holding the support zone and likely to scale higher like we have experienced in the earlier instances. 

Thus, following the technical parameters the stock has the potential to scale higher towards 210-240 in short to medium-term. 

The above view holds true until the price does not close below the lower end of the range. The strong support is visible around 181-174 levels.

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Disc. The above-shared analysis is solely my view as per my understanding and knowledge and for educational purposes. I will not be responsible for any loss or gain incurred.