Price Action of a stock tells a story. It helps one makes a decision whether to buy/sell/hold the stock. What does Price Action of Exide stock tell us?
Fundamental talking points:
- Exide Ind is a dominant player in storage battery space with a very strong brand name
- Exide Ind is set to launch Lithium-ion solutions for EVs soon
- One very strong Bullish theme in the market right now: Non-lending Financial Services. Exide Ind owns a 100% stake in Exide Life Insurance, and hence this can also be the trigger. All the market would like to hear: Strategic stake sale
- Exide is trading at 15 times FY21 estimated earnings and this does not assume any value for its insurance business.
There are enough reasons available for the stock to rally but the key question: Will it rally 🙄Â
Here’s how the Weekly Chart looks like –
Source: Chartalert.com
Exide Ind stock managed a decent rally from INR 120 to INR 300 between Jan 2016 and mid-2018. The stock rallied by forming bases, first at 170 and then at 200 and moved higher. Since the middle of 2018, it has been a very difficult period for the stock for everyone. It came down dramatically along with the market from levels of 300 to the first 200 and after holding it for some time slipped back to 170. Over the last couple of months, thanks to strong market conditions, the stock has done well to hold 170 and now seems to be rallying up but then has huge upside resistance at 200-210. Structurally, the stock is bearish on the weekly chart even though it’s trying to stage a recovery. Having said that – Long term believers in the stock can assume strong support for the stock between 170 and 180 levels.
Investors: Exide Ind is a buy as long as the stock trades above 166. Assumption: There are enough reasons for the stock to trade above 170 no matter what the market condition becomes.
Is there any Low-risk Trading Opportunity?
Source: Chartalert.com
The stock saw period of extended decline between Jan 2019 and August 2019 where it slipped from 270 to 170. Now in the last couple of months, the stock is staging a comeback and the recovery looks impressive. First it formed double bottom at 170 and now the stock is witnessing Bullish Moving Average cross over which means 50 day moving average has moved above 90 day moving average. It’s a sign that the trend of decline is reversing.
How to play the recovery – Exide Ind is a very attractive buy at current market prices for traders with a closing stop loss below 50 dma i.e. 185. The upside target is 300 if one is prepared to hold for 12 months+.
Please do your own due diligence before investing/trading