HONYFLOUR: The Bulls are on counter-attack; it’s time to react


Thursday, December 10, 2015 09.50 AM / Harish Shahi, The Analyst 

A closer look on the daily chart of
HONYFLOUR reveals that stock is falling down consistently by getting pressure from downtrend line and making successive lower highs and lower lows.

It seems the bears are beating the bulls black and blue and dominating them at every nook and corner. Stock is constantly falling down from N4.00 to N1.50 level which is generating further bearish signal.

The bears are driving the car and they are in full control, they are not ready to settle down for the time being as they are approaching N1.00 level in short term. A sharp sell-off and bloodbath can be seen on the daily chart.

The stock is falling down and heading towards south side, there would be no hope for the bulls for now but after arriving at N1.50 level which is an oversold territory, we saw some panic reaction and the bulls did the counter-attack during previous trading session.

Presently, stock is trading below all major and minor EMA lines and if it sustains above N2.00 level then it will provide further bullish signal. This will provide more strength to the bulls as it could trigger acceleration to the upside with N3.00 as next target.

All odds are in favor of the bulls and indicating a bullish signal. Both investors and traders are displaying bullish tendency towards the stock for the time being, they will get more aggressive once it trades and settles above N2.00 level.

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What Next?
A piercing pattern candlestick followed by bullish marabuzo candlestick is generating bullish signal for the time being. A bullish crossover on MACD indicator is also favoring the bulls. Both RSI and CCI indicators are providing bullish signal from a negative territory.

Intraday bias remains bearish on the stock as long as N1.00 level remains intact. The N2.50 level is key resistance level followed by N3.00 while N1.00 can be considered as key support level followed by N0.80 level.

Trade Idea:
Based on the charts and explanation above, traders can buy this stock at N1.60 level for the target price of N2.50 and N3.00 with tight stop loss of N1.00 level. The tentative time frame would be 10-12 days.

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

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