FLOURMILL: Buying opportunity with good risk & reward ratio

Proshare

Wednesday, August 12 2015 08.35 AM / Harish Shahi, The Analyst 


A closer look on the daily chart of FLOURMILL reveals that stock was falling down and making successive lower lows and lower highs. The bears had taken charge from N40 level to N26 level which is a strong key support level as it has received panic demand from this level earlier as probability of double bottom pattern is very high.


Yesterday we saw a bullish storm in the stock and it bounced from almost 10% which was the turning point for buyers. The way it has reacted aggressively seems that there is no more selling pressure and now bulls have taken charge with the double bottom price pattern.


Well, this is an early buy call, we hope to get further bullish signal. If bull’s trades and settles above N30 level then it will open the way towards the N35 level in short term.


There may be a lot of demand in the market and N26 continued to be a very strong support. The short term trend is down according to the daily swing chart, and momentum appears to be in favour of the upside. A sustained move above N30 will signal the presence of buyers and will provide more strength to bulls; this could trigger acceleration to the upside with N32 and N35 as next targets. 

           

All odds are in favor of the bulls and indicating a bullish signal. Presently, stock is trading between the crossed major and minor EMA lines and candles are totally generating bullish signal. Both investors and traders are displaying the bullish tendency towards the stock for the time being.

 



To View Technical and Interactive Chart with Indicators like MACD, RSI, Stochastic, Moving Average, Bollinger, Williams %R, MFI ... Click HERE



What Next?

A piercing candlestick followed bullish marabuzo candlesticks are providing bullish signal. Both RSI and CCI indicators have reached a positive territory and generating bullish signal. A bullish crossover on the MACD indicator is also favoring the bulls.

Intraday bias remains bullish on the stock as long as N25 level remains intact. The N35 level is key resistance level followed by N40 whereas N23 can be considered as key support level followed by N20 level.


Trade Idea:
Based on the charts and explanation above, traders and investors can buy at N29.50 level for the target of N35 and N40 level with the stop loss of N25 level.  The tentative time frame would be 8-10 days.

NB: Return on Investment based on trade idea above does not take cognizance of brokerage commission charges   


Related NEWS

FLOURMILL leads market as Smart Money boosts price - Proshare


To View Technical and Interactive Chart with Indicators like MACD, RSI, Stochastic, Moving Average, Bollinger, Williams %R, MFI ... Click HERE


For further details, kindly contact analyst@proshareng.com 


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