Friday, August 23, 2013

Is Renuka Sugar ready for short term uptrend(Technical Analysis)?

Renuka has tested support near 15 thrice in recent times, on 27th June, 6th Aug & today i.e. 22ndAug. Is renuka is forming bottom near 15 or it is continuing its downtrend by making short terms up move(waves) or is trying to get out from severe bear phase?

We don’t know exactly but as a trader we should ready for each & every opportunity to enter in market & that’s what we believe.

let’s assume if Renuka goes above this level again & break its recent high 17(resistance) which was made on 13th Aug, that will confirmed it was just testing its support near 15 but it still has potential to go up. Then we will discuss Renuka was forming its triple bottom near 15 & now it has confirmed its uptrend, yes that will also be good point to enter in Renuka but as a aggressive & opportunist trader we must think fast in entering in trade as well as exiting from trade.


So we can enter near support area & for Renuka its 15.

We never trade by seeing only one indication, so we need to study more to get in trade.
For Renuka, all we know it is near support area that is 1st & most important indication to enter.

Second indication is that its RSI is showing super strong trend, when Renuka first made support near 15, RSI was 27.85 & that is also diverging from current price.


When second time it was made support near 15, RSI was 32.30, it was again making divergence with respect to its price.

Third time means today it has tested its support level 15, RSI is 39.85.

It has confirmed that RSI is strengthening while Renuka is testing its support again & again.

Third indication is Volume is dying up from last few days, we can say Renuka is coming down because of lack of buying not because of selling & this is bullish characteristic for any tradable equity stock.


What will be the target if Renuka goes in uptrend?

By using Fibonacci retracements, we can get target of 24 for Renuka, because if Renuka has to go up then it has to rally more than of its first rally when it was moved from 14.80 to 20.55


After all market is king so anything can happen in stock market, that's why we need to have target as well as stop loss.

Stop Loss is most important factor than any other thing in Stock Market.
For avoiding major loss if Renuka prove our thought wrong, we need to have strict Stop loss in our trade & it is near somewhere today low i.e. 14.60 or we can have stop loss just below 14 to avoid triggering stop loss with thing margin.

Always remember when stock is in downtrend and showing reversal sign & it fails to get control over bears, then that stock can fall sharply, so never trade in any stock without strict stop loss when it is in downtrend or it must be have strict stop loss every time when we are in stock market.


See syllabus for Technical analysis training in Mumbai,India.

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