Sector to watch out for 2021 !!!

CNXFMCG : Breakout from Multi-Month Consolidation !! 

The Pandemic, Historic, Scary, Revolutionary (or any other name which you could think of), 2020 year is coming to an end and has been ending on a better note especially for the Stock Markets and for many investors, traders. And like me, everyone would wish such outperformance should continue for the coming year as well.

From such a thought, was analyzing the different sector's long-term charts which shall continue this rally and has a better risk-reward opportunity. To be honest, as most of the sectors are trading near fresh highs the charts are very robust, strong, and attractive. However, after analyzing most of the sectorial charts, the CNXFMCG index chart caught my attention and I believe this sector has much more steam left and could be one of the sector I would like to bet on for 2021.

The weekly chart of CNXFMCG attached below displays the perfect example of the "Law of Polarity" theory. The simple yet powerful concept provides strong support/resistance, trend strength and if analysis proved right it provides the best entry opportunity with favorable risk-reward in place. Also, from this chart, it shows for a better perspective it's important to focus more on the left-hand side of the chart rather than focusing more on the present chart scenario. 

From the above chart, it is evident that in most scenarios the earlier resistance has turned into support and the price enters into a new trading range zone. From the breakout since 2005, this scenario has continued so far. Every consolidation breakout later has turned into a demand zone and price rise higher entering into a new trading range zone. The same pattern or same scenario have developed currently. This month CNXFMCG index has witnessed a breakout from the long multi-month consolidation range which continued for more than two and a half years. So taking the reference point from the historical chart it is possible that CNXFMCG has entered into a new trading range and could be at the beginning of a new bull run. Going forward 33200-32500 would act as strong support for the CNXFMCG index.

Looking from the price pattern point of the view, the CNXFMCG index has registered a breakout from the long sideways parallel channel which continued for more than two and a half years with supportive momentum which is a bullish signal and compliments bullish view on price.

Another chart displayed below is the Ratio Chart of CNXFMCG and Nifty 50. The Ratio chart denotes, it has reversed taking support from the demand zone. If the ratio line continues to hold this support and rises higher, it shall indicate that the CNXFMCG index shall outperform the benchmark index in the coming months. Looking at the chart it suggests the ratio line has the potential to inch higher towards the upper shaded zone which is placed around  2.85-3 levels. The momentum indicator has surpassed oversold territory with a positive crossover which is a bullish signal and compliments a bullish view on price.

From the above Technical studies, I believe 2021 would be more better year for CNXFMCG index and related stocks. My view holds true till the Index does not close below the mentioned support zone and To the extent till the Ratio line chart does not breakout the support zone. 

Do share your thoughts in the comment section and If you agree do Share, comment and follow my BlogPost. 

Do comment the STOCK you feel can outperform in 2021 from FMCG basket. 

In advance, Wishing all the readers a very Prosperous, Healthy, and Wealthy 2021... Good Luck !!

Attractive Risk-Reward Opportunity

 KSCL : Resumption In Prior Bull Run !?!

This stock has been in a strong uptrend from March 2020 and this year overall has fared well for the stock. The upward momentum seems likely to continue in 2021. Overall chart structure seems attractive and offering the best risk-reward opportunity.   

I am following this stock from last many years and most of the time this stock has worked in favor and has moved as per the expectations, especially for positional trading. Looking at the chart setup I believe stock price likely to start the next phase of an uptrend.

Analyzing the weekly chart it has been observed that price was trading in Descending channel from last more than 2 years. This year the stock registered a decisive breakout from the mentioned pattern with supportive volumes and momentum. Post breakout price continued its up move for few weeks till 680 levels and thereon stock witnessed profit booking and which lead the price to drop towards Descending channel upper trendline which was earlier acting key resistance and now has turned into the support.

From the above chart, it is evident how precisely price has been respecting Parallel Descending Channel lines. From last many weeks, price has been taking support near channel line and in last week price witnessed strong upside movement and seems has completed the base and ready to commence its prior trend. The upmove in the week was well support with strong volumes which increases the reliability of the upmove.

Also near the same juncture there other multiple support visible which includes my Moving Average Bands, 50% retracement support of its prior whole rally from 274-683, Breakout from intermediate falling trendline with sizeable volumes, and wide bullish candlestick. Thus looking at the overall chart it gives a sense that price likely to resume its prior uptremd.

The Momentum Oscillator has reversed from oversold territory and recently has turned around taking cushion near 20 levels and its moving average with a positive crossover which is a bullish signal and complement bullish view on price. Also, the stock has been trading above all major moving averages which suggests strength in price in all time frames. 

Considering the above price pattern, volumes, and other technical studies, the price has the potential to scale higher in the coming weeks. In the short to medium run, the price has the potential to rally towards 590-650-730+ levels

The above view holds true until the price does not close below 480 levels. The strong support is visible around 511-496 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.

Stock of the week!

 ASIANTILES : AT THE CUSP OF A BULL TREND

This stock has delivered exponential returns to its investors in the year 2014-2017. Every correction or any dip in price was bought into and thereon a primary trend continues. The primary bull run in this stock continued for around 4 years where price rallied from 23 to 600+ levels in a matter of about 4 years which is an exceptional and whopping gain.  

However, in Jan 2018 this stock topped out, and post that stock has failed to resume its prior uptrend and every minor rally was sold into.The 2018 was a climax year for stock as the stock continued to remain under pressure for the whole year. The stock formed a top 617 in Jan 2018 and bottomed out around 130 in Jan 2019. This means stock gave up almost 80% of the gain in one year which took four years for stock price to rally.

Post printing a low around 130 in Jan 2019, the stock turned sideways and since then had been trading in a range of 270-130 levels. This consolidation phase continued for more than one and a half years and in early September 2020 stock registered a decisive breakout from the consolidation phase.

The consolidation took a formation of Probable Double Bottom price pattern which is formed after a downtrend and considered as bullish reversal price pattern in nature. The breakout has occurred with supportive volumes and sideways correction post that is seen with declining volumes which increases the reliability of the breakout. 

The rally from the lower levels has been seen with a rise in volumes and decline with low volumes which compliments bullish view on price and hints a genuine bullish price pattern on chart.

Another tool which I generally follow and mostly I consider a must parameter for an investment. The weekly band attached in the below chart shows how beautifully and accurately price has provided support to the stock when it was in the bull trend. Every decline in price got arrested near the Moving Average Band. After a good amount of time price has given a breakout from this band and holding above the same which denotes strength and bullish trend in price. (This Average Band works quite accurate in spotting key support and resistances as shown in this stock, TO KNOW MORE AND VALUE OF THE BANDS CAN DROP ME A MAIL ON MY GMAIL ID.

Considering the above price pattern, volumes, and other technical studies, the price has the potential to scale higher in the coming weeks. The further upside momentum in stock can be seen once the price surpasses above 320 levels. In the short to medium run, the price has potential to rally towards 375-425-500 levels

The above view holds true until the price does not close below 264 levels. The strong support is visible around 287-275 levels.

Thank you for reading, If u enjoyed and liked the post do share and comment. To receive the blog alerts on NEW POST, follow the blog.

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