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Kaveri Seed Technical Analysis #42: Sell | Target Rs 433 | Arijit Banerjee

OUR RECOMMENDATION

CMP#471.55
IdeaSELL
Sell Range480 – 470
Target433 – 410
StopLoss*508
Duration35 – 40 Trading Sessions
Potential Return^8 – 13%
CMP#IdeaSell RangeTargetStopLoss*DurationPotential Return^
471.55SELL480 – 470433 – 41050835 – 40 Trading Sessions8 – 13%

# CMP on April 09, 2019
* Maintain recommended StopLoss by daily closing basis.
   Once 1st target hit, reset StopLoss at 452.
^ The returns are calculated based on CMP#

COMPANY OVERVIEW

Kaveri Seeds limited produces, processes and markets hybrid seeds of field and vegetable crops. The company’s product categories include corn, sunflower, cotton, rice, tomatoes, watermelon, gourds, and brinjal.  Founded in 1976, the company earns the majority of its revenue from India. The company posts a 69% decline in net profit at Rs 3.65 crore in Q3FY19.

Stock Data
NSE CodeKSCL
SectorNifty 500
52W High660.7
52W Low368.8
Face Value2
Relative Performance_Kaveri Seed vs Nifty 50

TECHNICAL OBSERVATIONS (WEEKLY)

  • Since August 2016 till mid February of the current year, the entire corrective price action occurred in a well defined Triangle pattern as highlighted in the adjoining chart. 
  • On the weekly chart, Kaveri Seed has broken out the downside of a Symmetrical triangle pattern with very high volume triggering a fresh bearish trend.
  • After the strong breakout rally, the stock is seen moving towards the breakout area of 470-480 zone over the last six weeks. It highlights the change of polarity principle and signals a resistance building process that will act as a threshold for the next down move.
Kaveri Seed Weekly Chart
Kaveri Seed Weekly Chart

TECHNICAL OBSERVATIONS (DAILY)

  • ROC have formed negative divergence on the daily chart, which indicates lossing of selling momentum and possible fall with a trend reversal.
Kaveri Seed Daily Chart
Kaveri Seed Daily Chart

MONEY MANAGEMENT AND TRADING RULES

1)  It’s advisable not to enter/exit beyond the recommended range.
2)  Strictly follow the StopLoss as mentioned. Honour it.
3)  Use trailing StopLoss to retain profits.
4)  Diversify trading capital into our other technical recommendations.
5)  Risk only the money what you can afford to lose. Hedge accordingly.

ANALYST SUMMARY

This research analysis is prepared by Arijit Banerjee, CMT, CFTe. An engineering graduate developed an early interest in Trading since the age of 20. He is a Chartered Market Technician (CMT) accredited by CMT Association USA, the leading global authority of Technical Analysis and also has been honoured by Certified Financial Technician (CFTe) from the International Federation of Technical Analysts (IFTA), USA. His contribution to the market research was recognized by SEBI, the Regulatory Body of Indian financial market and given him the registration number INH300006582 as a Research Analyst. Over the years, he has gained experience in Technical Analysis with a demonstrated history of working in different asset classes. Himself as a trader, he has trained and continues training novice and experienced traders to become successful, confident and profitable in the financial market.

Disclosure

The views expressed herein are based solely on information available publicly/internal data/other sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. The recommendations provided herein is solely for informational purposes and are not intended to be and must not be taken alone as the basis for an investment/trading decision. Trading and investing are subject to market risk and the securities discussed and opinions expressed herein may not be suitable for all investors. To read the full disclosure, please click here.

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