VITAFOAM: Buying is expected at golden retracement level

Proshare

Thursday, December 31, 2015 07.50 AM / Harish Shahi, The Analyst 

A closer look on the daily chart of VITAFOAM reveals that stock was heading towards south side and was falling down due to pressure from the downtrend line and making successive lower highs and lower lows. Stock was constantly moving down from N6.60 to N4.40 level but after arriving at that level, we saw panic counter-attack and it bounced back to N5.15 level.

 

Stock moved up above the moving averages and sustained above that level which creates hope for the bulls. As bears could not sustain at that level, the bulls took charge. Presently, bulls are dominating the bears and heading towards north side. Well it’s an early buy signal; we will get further bullish confirmation above N5.50 level.  

 

From technical perspective, we can see valid breakout of downtrend line on the daily technical chart, so a valid breakout of this line will open the way towards N6.50 level. The way the bulls are reacting seems that they are approaching N6.50 and N7.00 level in short term.

 

The entire primary trend is up and secondary trend is down so in a uptrend market buying on dips will be a profitable strategy, one can go for short term buy only.

 

Presently stock is trading above all the major and minor EMA lines and providing us bullish signal. Above N5.50 level it will provide us further presence of bulls and will provide the more strength to bulls; this could trigger acceleration to the upside with N7.00 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.




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




What Next?

A bullish marabuzo candlestick followed by bullish engulfing candlestick pattern 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 bullish on the stock as long as N4.50 level remains intact. The N6.00 level is key resistance level followed by N7.00 while N4.00 can be considered as key support level followed by N3.50 level.

 

Trade Idea:

Based on the charts and explanation above, traders can buy this stock at N4.92 level for the target price of N6.00 and N7.00 with tight stop loss of N4.00 level. The tentative time frame would be 6-8 days.

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

Related NEWS

VITAFOAM Records 26.8 Drop in PAT in Q3 15 Result SP N5.90k - 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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