BATA INDIA: WILL IT CONTINUE UPWARD MOVEMENTOR A CORRECTION IS ON THE WAY10
MAY 2012Bata India on the weekly chartBata India has been a favorite stock for the value investors. People discovered its value in the early 2009 when the market,after the catastrophic decline of 2008, started to gather strength and started moving up. Bata India was trading at the levelsof hundred and change. On the way up it gathered mass as can be seen on the charts. It moved up flawlessly until it foundresistance at the 730
740 levels it came back all the way to 520
528 levels and then once again it moved to try andsurpass the 731 levels.Now in the process of doing so it made a very distinct and potent inverse head and shoulder as can be seen on the secondchart. After breaking out of this head and shoulder, in the way it should, the price target was somewhere in between 910
930. The high that has been established by Bata India is 887 which is almost the target.After breaking out of the head and shoulder formation, the prices started to move in a channel.Now what we can gather about the next move of the prices from the charts are as under-
The prices have managed to stay above the 50 tick moving average (each tick represents a week), but they have toconverge towards the moving average, reversion to the mean. If it does so the prices will have to come down.
Considering the last three ticks, the first from the left is a hanging man (a bearish signal) which is followed by ashooting star (a very potent bearish signal in context of the technical analysis) this is followed by another shootingstar.