Dabur ltd impulsive towards rallying despite breaking 200 DMA

9th April 2019

After breaking 200DMA on 27th march Dabur ltd had sharp decline of around
4.5% and now supporting its crucial 400-mark support. The buyers are taking a
march upwards whatever it takes buying above 400rs. The volume indicator ADL
is also supporting its negative money flow, here ADi, AD1, AD2, AD3 & AD4 (in
the chart) are levels where it changed the direction of the volume flow. After
breaking the AD1 level and then within a short period again it crossed the
resistance (AD2). AD3 and now AD4 is at the same levels supporting the all-time
ADi, AD2 & AD3 levels for the current primary trend. We expect a bounce from
this level with in a short time period.

The Relative Strength Index (RSI,14day) shows future gaining in the stock. The 31
level of RSI for Dabur ltd is the all-time oversold level, now it is gaining a upward
moderate move slowly (current level 36) and further may show more strengthens
in the trend. RSI1, RSI2 , RSI3 , RSI4 , RSI5 are the supportive levels. The level above
47 RSI is the confirmation for a strong uptrend taking back a historical view,
investors can sit tight for a good return.

The Commodity Channel Index (CCI) cleared the -100 level and now indicating
at -85 level shows the weakness in the negative trend. This could confirm once it
crosses the 0 levels and moving towards the +100 level and then entering the
strong buying zone. Any sharp upwards movement within a short time frame will
trigger the buyers to cross the +100 level of CCI and can extend the rally further.
Taking a note of the primary trend S1, S2, S3 are the levels where the sellers are
losing their upper hand. The extended line connecting the x1, x2, x3 points in the
above chart will act as a strong resistance level for the upward movement of
the stock. Before this the level around 417rs should be crossed and sustain the
level to form a strong support there. If this level is supported in future, we can see
a strong build up for the continuation of the primary trend. After this the triple
top levels x2, x3, R4 has to be surpassed and the stock will gain a momentum for
the new highs, thus breaking the sideways channel. The extended line
connecting R1, R2, R3, R4 levels will act as crucial resistance and once it is
breached it breaks the primary bullish channel for further aggressive buying. The
orange rounded rectangle in above chart shows a formation of the symmetrical
triangle chart pattern, a bullish continuation pattern.

However, Dabur ltd can show a weakness if the 390rs level breaks and sustain
below it and then making bearish moves. If these levels are again breached
above 400-mark the rally continues as discussed.

Here the current resistance levels for a rally are 417, 433.5, 449. Since the
company is fundamentally maintaining well quarter by quarter results, new
money flow is quite possible for a defensive approach for the long term
investors.
The above study is for a period of 3 to 6 months. The chart time frame is daily.
For a short term view, (current price 403.65) breaking the descending triangle
lower highs trend line levels (the blue colored trend lines) we expect a move
towards 409rs level and then towards 417rs level. The bearish channel (black
colored trend lines) also shows a reversal for a upward movement breaking the
resistance of the bearish channel after sustaining the crucial support of 400-mark
level. Once it surpasses the 417rs level the 200DMA and the 9DEMA, 21DEMA
levels are also crossed, these can be taken in consideration for the continuation
of the rally upwards. A push above the 420rs level and sustaining there can
further discontinue the consolidation. The stop loss for the bullish view should be
round 390rs.

Contact: tisyag.research@gmail.com