Page Industries – Ready for Another Upside

Page Industries – Ready for Another Upside

Page Industries Ltd is offering a good buying opportunity with a risk : reward ratio of 1 : 5.

The stock price can run up to Rs. 17680 from the current levels and the stop loss should be placed at Rs.13000.

Detailed Analysis

Bengaluru-based Page Industries is the exclusive licensee of Jockey International Inc for manufacture and distribution of the Jockey brand inner-wear and leisure-wear.

The stock underwent a significant correction after reaching the all time highs in June ‘2015 and fallen up to as low as Rs.10000 after the promoters of the company sold stake in the company.

The stock posted a strong recovery aided by the overall improvements in the market sentiments but couldn’t go past 14000 levels (which is 78.6% Fibonacci retracement line of the prolonged uptrend from the IPO value to the all time highs); the once support turned  resistance hindered the prospects of continuous upward movement.

The share price retraced to Rs.12430, then quickly came back strongly to re-test 14000 levels by close of last week trading.

Here’s the important thing to notice in the chart pattern.

The retracement up to Rs.12430 coincides with the lows the stock had posted before plummeting to 10000 levels.

In other words, the retracement up to Rs.12430 and quick turnaround to Rs.14000 suggests that the stock has formed inverse “Head & Shoulder” Pattern.Page Industries - Technical Chart

Inverse head & shoulder is the opposite of popular head and shoulders pattern, but it isused to predict changes in a downtrend rather than an uptrend; upon forming, this pattern suggests either the stock is going to

  1. Reverse ( if the stock was in downtrend )
    Or
  2. Continue ( if the stock corrects after the prolonged uptrend and the neckline falls at the same highs from where the stock starts correction )

It’s clearly visible from the chart that it’s the reversal pattern which the stock has produced with two shoulders one a piece on either side of the centre shoulder.

The neckline value at 13700 got breached today with a surge in volume’s; this gives a clear indication that the inverse head and shoulder breakout took place and it’s an opportunity to go long on Page Ind. shares that can reward the investors handsomely.

For optimized results consider investing 70% of the allocated amount at the current price and 30% if the return move takes place i.e. if the price falls back to Rs.13700.

DISCLAIMER: EquityBoss or anyone involved with EquityBoss will not accept any liability for any trading loss or damage as a result of reliance on the information contained within this post including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with investing the financial markets, it is one of the riskiest investment forms possible. EquityBoss would like to remind you that the data contained in this post is neither necessarily real-time nor accurate. All stock prices, Fundamental/ Valuation indicators, buy/sell Signal are indicative and not appropriate for trading purposes. EquityBoss doesn’t bear any responsibility for any trading losses you might incur as a result of using this data.
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