The perspective behind the post yesterday, on State Bank of India(SBI) , has seen a lot of reiteration by other media sources like Moneycontrol and business dailies,however, the market seems to be in denial mode to buy the story. Also, a lot of brokerage houses still maintain a buy rating on the stock,with minor cuts in the target for FY12. But as we know that apart from the intrinsic value of the stock, the emotional sentiment of the markets weigh higher and play an important role! So, we try to decipher the stock chart, in order to understand the market sentiment
There have been many price targets of around 2200-2250,etc, etc.. making waves,but almost none of them have proposed a substantial chart pattern backing them apart from looking at the long term support levels.
In this post, the analysis of SBI chart has been undertaken ,so some sense of direction can be derived that where the stock is heading towards!
The analysis of the charts, have indicated a Descending Scallop Pattern, this pattern has been indicated in the figure below, for further understanding. The price target have been indicated through the arrows depending on the type of breakout which may occur
We may now have a look at the SBI Chart below, which display the similar pattern and has already given a bearish breakout!!!
As per the pattern, the downside on SBI is at the levels of 2172 - 2184 ( calculated using the peak points 'A' and 'B') . The stop loss here would be at 2484.
Interestingly, according to the Fibonacci retracement theory the 50% retracement level is at 2200 and 2485 levels form the 38.7 % retraction, this further confirms the price range for the stock
Apart from the bearish sentiment around the stock , the overall sentiment in the markets has also been a bit negative,which is further weighing down on the stock. So, once the individual stock related sentiment cools down, the broader markets would decide the future course, at which the investors see an entry point in to the stock.
We would try and cover the markets post this sessions, which is trading in an extreme narrow range...
Till then...stay tuned!
There have been many price targets of around 2200-2250,etc, etc.. making waves,but almost none of them have proposed a substantial chart pattern backing them apart from looking at the long term support levels.
In this post, the analysis of SBI chart has been undertaken ,so some sense of direction can be derived that where the stock is heading towards!
The analysis of the charts, have indicated a Descending Scallop Pattern, this pattern has been indicated in the figure below, for further understanding. The price target have been indicated through the arrows depending on the type of breakout which may occur
As per the pattern, the downside on SBI is at the levels of 2172 - 2184 ( calculated using the peak points 'A' and 'B') . The stop loss here would be at 2484.
Interestingly, according to the Fibonacci retracement theory the 50% retracement level is at 2200 and 2485 levels form the 38.7 % retraction, this further confirms the price range for the stock
Apart from the bearish sentiment around the stock , the overall sentiment in the markets has also been a bit negative,which is further weighing down on the stock. So, once the individual stock related sentiment cools down, the broader markets would decide the future course, at which the investors see an entry point in to the stock.
We would try and cover the markets post this sessions, which is trading in an extreme narrow range...
Till then...stay tuned!
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