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CONTENTS
GLAXOSMITHKLINE PHARMACEUTICALS (GLAXOPHARMA)
HOUSING DEVELOPMENT FINANCE CORPORATION (HDFC)
LIST OF FIGURES
Figure 1: GLAXOPHARMA 2002-2009
Figure 2: GLAXOPHARMA 2008-2009
Figure 3: GLAXOPHARMA Technical Indicators
Figure 6: HDFC Technical Indicators
Figure 9: HDFCBANK Technical Indicators
Figure 10: INDHOTELS 2002-2009
Figure 11: INDHOTELS 2006-2009
Figure 12: INDHOTELS 2007-2009
Figure 14: INDHOTELS Technical Indicators
Figure 19: LNT Technical Indicators
GLAXOSMITHKLINE PHARMACEUTICALS (GLAXOPHARMA)
General Information
Industry: Pharmaceuticals
Index Membership: BSE 100, BSE HC
BSE Link: http://bseindia.com/stockreach/stockreach.htm?scripcd=500660
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Price Objectives
Upper 3 | 1890 | Extensions |
Upper 2 | 1760 | Extensions |
Upper 1 | 1720 | Figure 2 |
Current Price | 1665 |
|
Lower 1 | 1550 | Figure 1 |
Lower 2 | 1440 | Figure 2 |
Lower 3 | 1280 | Figure 2 |
§ Since historical price action cannot be used to estimate upper bounds, I developed the following methodology in forecasting upper bounds. I do not know if this is similar to extensions as I have had no prior exposure to Fibonacci Extensions.
§ The assumption is that the rally from 1000 to 1550 constitutes 100% of the move. If Glaxo does not retrace from this point, then it will extend by the Fibonacci ratios.
§ Upper Bound 2: ((1550-1000)*.382)+1550 = 1760
§ Upper Bound 3: ((1550-1000)*.618)+1550 = 1890
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Observations
§ Figure 1
o Upside breakout above the 1550 resistance level
o The 23.6% confluence zone coinciding with the 1550 level should strengthen this support level
o The next major inflection point lays where the 23.6% and 61.8% confluence zones coincide- ~1250
o Worst comes to worst, Glaxo will find tremendous support at the 890 level
§ Figure 2
o An up trending channel is evident
o It will be premature to say that Glaxo failed to reach the upper trend line of the channel. Therefore, we’ll have to wait for the price action to pan out.
o If Glaxo breaks out below the lower trend line, then the price targets are determined by the Fibonacci retracement levels. (1550, 1440, 1280)
§ Figure 3
o Technical indicators are largely neutral-bearish
o Flat MACD despite Glaxo registering higher peaks and troughs.
o RSI still in the higher range.
o DPO approaching the zero line
o Declining participation as the rally progresses
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Technical Analysis
Figure 1: GLAXOPHARMA 2002-2009
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Figure 2: GLAXOPHARMA 2008-2009
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Figure 3: GLAXOPHARMA Technical Indicators
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HOUSING DEVELOPMENT FINANCE CORPORATION (HDFC)
General Information
Industry: Housing Finance
Index Membership: SENSEX
BSE Link: http://bseindia.com/stockreach/stockreach.htm?scripcd=500010
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Price Objectives
Upper 3 | ~3600 | Completion level of the largest ascending triangle |
Upper 2 | 3260 | Figure 5 |
Upper 1 | 2900 | Figure 5 |
Current Price | 2815 |
|
Lower 1 | 2450 | Figure 4: 61.8% Retracement level |
Lower 2 | 2100 | Figure 4 |
Lower 3 | 1100 | Figure 4 |
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Observations
§ Figure 4
o HDFC needed significant participation to penetrate above the 2100 level. Thus, we can say that this level will prove to be a solid level support upon retracement
o The previous peak at ~3260 in 2008 will eventually serve as a major resistance level
§ Figure 5
o HDFC is currently experiencing resistance at the 2850 level
o An upside breakout should see HDFC rally to 2900
o We should see HDFC challenging the previous peak if it manages to penetrate above the 2900
o The bullish patterns here are the 3 ascending triangles that I have identified
§ Figure 6
o Diverging DPO and %D approaching the overbought region
o If MACD forms another peak before prices retrace lower, then an MACD divergence will be evident
o RSI is perhaps headed lower. A cross below the signal line will give sell signals
o Technical indicators are neutral-slightly bearish
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Technical Analysis
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Figure 6: HDFC Technical Indicators
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HDFC BANK (HDFCBANK)
General Information
Industry: Banks
Index Membership: SENSEX, BANKEX
BSE Link: http://bseindia.com/stockreach/stockreach.htm?scripcd=500180
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Price Objectives
Upper 3 | 2470 | Extensions |
Upper 2 | 2220 | Extensions |
Upper 1 | 1825 | Figure 7 |
Current Price | 1740 |
|
Lower 1 | 1575 | Figure 8 |
Lower 2 | 1425 | Figure 7 |
Lower 3 | 1170 | Figure 8 |
I will have to work with the methodology I used upper bounds for GLAXO. Assuming the 100% move is from 768 to 1817.
Upper 2: ((1817-768)*.382) + 1817 = 2220
Upper 3: ((1817-768)*.618) + 1817 = 2470
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Observations
§ Figure 7
o HDFC is fast approaching its 2008 peak’s level at ~1825
o The question is whether HDFC will be able to significantly penetrate this level
o A major support level lies at the 1425 level. The 23.6%, 61.8% and the triangle apex level coincide at this level
§ Figure 8
o Ascending Wedge- We may witness a throwover to the upside before HDFC retraces.
o Symmetrical triangle apex is only a couple trading sessions away.
o Both of the above points have major bearish implications for HDFC
o The 1575 (triangle top) is a significant support level as the 23.6% and 76.4% coincide at this level
o Retracement levels are identified.
§ 73.4% and 23.6%: 1575
§ 61.8% and 38.2%: 1420
§ 50% : 1300
§ 38.2% and 61.8%: 1170
§ 23.6% and 73.4%: 1020
§ Figure 9
o Technical indicators are imply overbought conditions.
o If HDFC continues to rally and MACD does not reach or cross its previous peak, then we will witness a negative divergence. As such, we’ll become more bearish.
o Overbought RSI and %D: Bearish implications
o Perhaps a negative divergence in the DPO because prices are rising whereas DPO continues to decline
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Technical Analysis
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Figure 9: HDFCBANK Technical Indicators
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INDIAN HOTELS (INDHOTELS)
General Information
Industry: Hotels
Index Membership: BSE100, BSEMIDCAP
BSE Link: http://bseindia.com/stockreach/stockreach.htm?scripcd=500850
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Price Objectives
Upper 3 | 178 | Figure 10 |
Upper 2 | 120 | Figure 11 |
Upper 1 | 92 |
|
Current Price | 85.35 |
|
Lower 1 | 83 | Figure 13 |
Lower 2 | 70 | Figure 13 |
Lower 3 | 51 | Figure 10 and Figure 13 |
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Observations
§ Figure 10
o Peak at ~178 in 2008
§ Figure 11
o Penetration above a resistance line. This line is now supporting prices
o An upper price objective is the 61.8% retracement level at 120
§ Figure 12
o Saucer shaped recovery
§ Figure 13
o Up trend channel. INDHOTELS being supported by the support level at ~83
o Triangle apex level at 70 will prove to support prices
o The next support level stands at 51 where the 76.4% and another support/resistance level nearly coincide
§ Figure 14
o %D in the oversold region. Glancing over Figure 14 we can see that every time %D has reached such a low level, the price has rallied substantially
o The other indicators are neutral to bearish.
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Technical Analysis
Figure 10: INDHOTELS 2002-2009
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Figure 11: INDHOTELS 2006-2009
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Figure 12: INDHOTELS 2007-2009
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Figure 14: INDHOTELS Technical Indicators
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INDIAN OIL CORPORATION (IOC)
General Information
Industry: Oil Marketing & Distribution
Index Membership: BSE 100, OILGAS, BSEPSU
BSE Link: http://bseindia.com/stockreach/stockreach.htm?scripcd=530965
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Price Objectives
Upper 3 |
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Upper 2 |
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Upper 1 |
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Current Price |
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Lower 1 |
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Lower 2 |
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Lower 3 |
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Observations
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Technical Analysis
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LARSEN & TOUBRO (LNT)
General Information
Industry: Construction & Engineering
Index Membership: SENSEX, BSE CG
BSE Link: http://bseindia.com/stockreach/stockreach.htm?scripcd=500510
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Price Objectives
Upper 3 | 2340 | Figure 17 |
Upper 2 | 2100 | Figure 18 |
Upper 1 | 1700 | Figure 17 |
Current Price | 1649 |
|
Lower 1 | 1370 | Figure 17 |
Lower 2 | 1140 | Figure 18 |
Lower 3 | 900 | Figure 18 |
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Observations
§ Figure 17
o Previous peak in 2007 at 2340 level.
o Current resistance at the 61.8% confluence zone at around 1700
§ Figure 18
o Ascending triangle price objective (2100) is slightly higher than the 76.4% confluence zone (1910)
o The top of the gap up at 1140 should support LNT from falling below if the up trend is strong.
§ Figure 19
o Neutral indicators signaling either an up move or a down move of significant magnitude is possible
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Technical Analysis
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Figure 19: LNT Technical Indicators
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- Sanjeet S. Parab
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