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Identifying a bottom in any stock is a very tough task. Its like walking on a wire without any balancing bar in your hand. So only choice investors have is to jump in with a stop loss. There are signs of possible bottom in this current correction we have seen.
"Bottoms are formed when everyone is negative and they just hate stocks."
We have not see that kind of hatred in current market. Even though sell off has happened, it is orderly. There is no panic selling yet. So it is possible that we are observing fake bottom. Lets discuss few opportunities now.
Please add following stocks to your watchlist
Axis bank
Axis bank stock has been under constant accumulation even though stock been under downtrend. You need to observe the amount of volume in green colour. Its very high. This makes me conclude it is under accumulation. It appears that it is building base and will take some time to come out of base until the sentiments turns really bullish. It would be a good point to enter for those who wanted to enter this script.
HDFC
HDFC is at long term support line. Red dotted line is 400 day moving average line. HDFC has been holding line. What makes it interesting to buy now is two large volume accumulation days. It has put in a bottom at 588 level. So it becomes a stop loss point too. Upside is not very compelling in this script but wanted to discuss it because this is a low risk entry point on it.
IDFC
IDFC has been in perfect bear market setup. This is one stock that we can call as speculative trade. It has really been sold of very hard very similar to DLF. The reason it is on buy block is because people hated is two days ago. They sold it like it was hot burning coal in their hand, in other words there was a panic sell day on this stock. After panic sell, observe two heavy volume accumulation days, it says it all. Must exit if it closes below 120.
Jindal Steel
It is close to long term support line. Its a range bound stock and right now it is close to its support line. It will be a speculative investment. Stop loss on this is 600.
Kotak Bank
Kotak Bank has also seen panic sell off day and huge accumulation days.
Similar is story with Larsen and Toubro.
Same story of Mahindra and Mahindra
Overall many NIFTY components are witnessing supportive action that is a good point to buy NIFTY ETF too. That way you minimize your risk and participate in upcoming rally.
Thanks
Anil
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