Titan Industries ltd.
Suggestion: Buy; SL @ Rs. 850
Last Price 856.05
Figure 1 shows how the stock price of Titan has been moving daily. It also shows the 3 SMA lines – 4, 9 and 18 day. The 18-day SMA line has recently crossed the 9-day SMA line and is now moving below it. This was the signal that was being awaited, because the 4-day SMA was anyways above all SMA lines and therefore this move marks the starting of the Bullish phase. But looking at the 9-day SMA line, it seems that the Bullish phase might be short. This is because the direction of movement of 9-day SMA line is such that it might cross the 4-day SMA in further sessions, marking the end of the Bullish phase.
ADX or Average Directional Index (as shown in figure 2) helps in identifying the current phase of the stock. The stock can be either in trending or trading phase. The current value being 13.47 indicates that the stock is in the trading phase and therefore oscillators have to be used for further analysis.
But before looking at the oscillators, it is always better to have a look at the general indicator – Bollinger Band (shown in figure 3). The price has recently crossed the 20-day SMA (base line) and is now moving above it. This means that the Bullish phase has started, but this has to be confirmed using an oscillator which is done below.
RSI or Relative Strength Indicator is one of the widely used oscillator for identifying the phase of a stock. RSI for Titan is shown in figure 4. The RSI graph has recently started falling while the stock is rising. This is one of the strongest signal by the RSI, indicating that the Bullish phase has started.
Therefore, it is confirmed that the Bullish phase has started for Titan. The investor can easily benefit from this phase by buying at the current market price. However, a Stop loss at Rs. 850 is advised.