It has been several months that I have been away from blogging actively. I utilized this time to sharpen my understanding about the market movement and worked on tools that would help me to shape up and come back in a much stronger manner
Recent past has been very challenging with few wins and losses booked for me personally as well as for my investor but then the beauty of market is that it is not for the weak hearted. Markets keep running always, it is up-to us to match the pace and predict trends that could help us make money out of it. No one ever makes money without losing some, and that is so true when it comes to financial markets
Now coming back to the technical analysis part of it, I have been following KPIT very closely for a while and there are reasons for that,
1. Fundamentally the company has been registering a fantastic Y-O-Y growth of more than 35% and that is way high when compared to NASSCOM's standard of 13% to 16%
2. 80% of my inclination to buying stocks is not basis fundamentals or daily news (infact I hardly watch it), the Elliot wave count for KPIT has been pretty much pointing to upward direction and this urges me to focus more, more and more
Elliott Wave Analysis
Daily Chart
As we all know Elliott wave has a 3 major wave movement upward. A, B & C. At outset KPIT has completed 2 out of the 3 waves, that is right. A & B are completed and it is currently unfolding towards making a C wave. Inside the major C wave we will have 5 wave movement to achieve those levels. KPIT according to my prediction basis EWC has completed 4 out of the 5 waves and it marching towards the final journey
Weekly Chart
Usually 3rd wave will make a minimum of 161.8% of the 1st move and what it shows through weekly chart is that it has successfully completed that level by making a high of 142. Wave 4 made a 50% retracement of wave 2 and bottomed out at 92 levels
Adding to the wave count if you look at the Supertrend indicator it had a resistance at 119, KPIT struggled to hit that level for couple of days but the good news is it has broken the resistance level yesterday and now it is going to fly high
The 5th wave is neatly going to get drawn sharply and thanks to dollar strengthening which will add up as a good news for all the IT companies which have major presence/client base in the US
Gann Fan
This works pretty good both for a up or a down wave move. If all you wonder why the stock hit a high and had a resistance to move further up then you should practice using Gann Fan and work this along with fibonacci retracement and extension levels.
Clearly we could see from the chart given below that there are 3 areas of resistance. Especially the topic of interest is the 3rd level of resistance which is around 133 to 135 levels. It is just an intermediate resistance level however folks who want to stay invested can continue holding long positions until you see it hitting 167 levels
Summary
1. Buy KPIT on every decline, keep SL at 90 and go long
2. Target for 5th wave is above 165
Note : I'm looking out for investors who can invest anywhere between 15 to 20 Lakhs and should embrace a long term vision for the market
Have you read Ramki Ramakrishnan's book on "Five waves to financial freedom"? If not, do not hesitate to buy it does not cost more than 500 to 600 Rs, just go grab it and is worth a million times more than the price of the book
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