JYOTHY LAB - Detailed Technical Analysis Study

JYOTHY LABORATORIES LIMITED                                    Date: 18 July 2015

CMP 306.45

Fundamental Snaps -

Sector - FMCG,                                 Industry - Cosmetics & Toiletries

6M Average Volume: 171,518	P/B: 7.38	PE: 45.73
52-Week Range:  175.20 - 314.90	Dividend Yield: 1.31%	Market CAP: 5539.32
TTM EPS:  6.69	Book Value:  41.48	Face Value:  1

Detailed Technical Analysis -

Long Term View - Bullish

Medium Term View - Sideways

Short Term View - Bullish

Monthly Chart -

v  Very Nice Higher High & Higher Low price structure on Monthly Chart

v  Long Term Breakout observed in Aug 2012, till now it continue to maintain the bullish structure

v  3rd Hidden Positive Divergence recently on May Month which is extreme bullish view for Longer term

v  Must have this stock in the portfolio for longer term.

v  Current July Month is ongoing and stock price is near at Resistance level

v  Accumulate this at every fall with Stop loss of 235

Weekly Chart -

  v  On weekly chart, Circled area located was the Smart money entry area. Hidden Divergence indicates the Smart money did investment.

v  What is Hidden Positive Divergence ( few also called as False Divergence) -

o    Hidden Divergence is opposite of simple Positive Divergence. So let's understand simple divergence.
o    When price breaks the last swing low (Lower Low formation) but RSI didn't break its last swing low (Higher Low Formation) is called positive Divergence.
o    So Hidden Positive Divergence is exactly opposite of Simple divergence. When Price makes higher low (didn't break previous swing low) and RSI made higher high formation (Breaks its previous low) is called Hidden Positive Divergence.

v  As per Elliott wave, Complete upmove is in the ascending channel and looks like complex correction.

v  Complex correction will have 2 or 3 complex patterns and hence marking them as ABC - X - ABC - X -ABC

v  Currently price is in the 2nd complex pattern and Wave 'B' is ongoing.

v  if last high of 314.90 breaks in next 3 weeks then we can consider Wave 'B' is completed and Currently price is in Wave 'c'

v  Currently price is at 306.45, hence high possibility that price will breach last high in coming days.

v  So, There is high probability that price is in the C wave.

v  But Before that lets drill down more  details of ongoing Wave 'B' in daily chart below.

Daily Chart - 

v  On Daily Chart, Price looks to be near to resistance and on verge to breakout its Resistance.

v  RSI is above 60.

v  we have missed the ideal Entry where 235 is marked or RSI 40 level and smart money entry area.

v  Anyhow what's now - we will try to figure out -

v  as per Elliott wave, Wave is B is ongoing on Higher Degree and Internal of B is either lat or Complex pattern.

v  Wave 'w-x-y' is completed as of now and currently it is either 'x' wave of 'B' or C wave of Higher degree. This will after few days.

v  Currently, Volume is not supporting to the last leg of upside at all.

v  If breakout happen above 315 with Higher volume then it confirms then Wave C is ongoing.

v  The last leg downside or wave 'y' has took 62 days and hence breakout has to happen before 10th August 2015, then only it will confirms that Wave 'B' is completed and Wave 'C' is ongoing.

v  If low volume and breakout not sustain then it will indicate that another last leg downside is pending as 'z' wave of wave 'B'.

Finally, My Take would be -
If we don't want to miss this rally (or future rally) and do the step wise investment with prudent money management rules as mentioned below-
1) On breakout with higer volume - Invest 1/3 of the capital above 315                1-1) If breakout not sustained then add 1/3 more near 320-325 level                1-2) and last 1/3 amount on retest level of 315 again.
                                                ORIf breakout and breakout not sustained
2) add second 1/3 amount at level 290-260 level
3) third 1/3 amount again again on next breakout 315 level
 Then Hold complete amount for target of C wave  -

ü  1st target is 365

ü  2nd target will be 444

ü  with Stop Loss 235

Happy Investing!!!

Yogi :-)