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Sunday, October 31, 2010

Reliance Comm Weekly: 25-29 Oct'10: Doji Candlestick


Reliance Communications Weekly Stock Chart on NSE Technical Analysis

The NSE weekly chart of Reliance Communications formed a Doji for this week.  It's a picture perfect formation, the stock price closed at less than Re. 1 higher on Friday than what it opened at on Monday.  What a super indecisive time for Reliance Comm!  The market is confused on what way this will move.

The week opened at 179.5 and closed at 180.1.  In between it made a high and low of 185.35 and 173.2.  

Outlook for next week:  The picture is not pretty.  The next week could turn negative price could fall back to end the week negatively.

Technical Indicators:

The moving averages look like creepers hanging from trees in the jungle.  The price has stayed below even the 20 week moving average for most part of the past 2 years.  And that's bad!

This week, it has crossed the 20 week moving average and touched its 50 day moving average.  Historical evidence shows that the stock price does not manage to stay above its 50 day moving average, and so breaking this level to rise upwards is going to take a lot of energy.

The stock is already showing oversold levels.  This means its a possible time for a downhill journey this week.  

The picture perfect Doji candlestick shows excessive indecisiveness amongst buyers and sellers.  Even then, the interest has not waned and the volume of trading is almost double the previous week.


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