18 DALAL STREET INVESTMENT JOURNAL I JULY 22 - AUG 4, 2019 DSIJ.in^
Technically, the stock closed at a new lifetime high with
massive volumes. It has broken out of 23-week flat base
pattern and trading above the long term moving
averages. The 50-DMA clearly turned upside and well
above the 200-DMA. The stock took support at
200-DMA several times in basing pattern. The MACD
line is just above the signal on the weekly chart and
above the zero line, which indicates the positive
momentum. The MACD histogram also turned above
the zero line. The RSI has broken out of a long triangle
pattern and closed above the prior high. The indicator
entered into a bullish zone with 62.09 on the weekly
chart. The positive divergence in stochastic oscillator
along with RSI confirms the upside breakout. The
increase in volumes above the 20-week average in just
one day shows that accumulation in large quantity
happened on Monday. The directional index ADX is
above the -DI and the +DI is above the -DI, indicating
the strength in the breakout. Its price strength (RS) is at
83 and with the higher demand and a better master
score, the stock is meeting all the CANSLIM criteria
except EPS rating. As improving guidance and with EPS strength at 60 and return on equity at 23.7, the stock is looking strong
fundamentally and technically. BUY this stock at `784.95 with a stop loss of `735. The target is `840, followed by `850 in the
medium term.Technically, the stock has broken out of 50-week cup
formation with a 26 per cent depth. The breakout was
with above-average volumes on July 15 and sustained for
the second day. The stock is trading 4 per cent above the
prior pivot level. At the same time, the stock is above
50-DMA. The 50-DMA is above 200-day and 100-day
moving averages and turned upside. The RSI reached
above the 60 level after Jan 2018 and is in the bullish
zone on the weekly chart. The MACD histogram also
increased for the past few weeks and is indicating the
positive momentum in the stock. With a higher EPS
strength (92) and price strength (RS) at 88 and 17 per
cent return on equity, the stock looks attractive at the
current level on a CANSLIM basis. BUY this stock at
`211.95 with a stop loss of `190. The target is open
towards `240-250.STOCK RECOMMENDATIONS
BSE Code : 500209
BSE Code : 532702
Target 1 .... 840 | Target 2 .....850 | Stoploss....`735 (CLS)
Target 1 ..... 240 | Target 2 .....250 | Stoploss....`190 (CLS)
INFOSYS ............................... BUY .......................... CMP `784.
GSPL .................................... BUY .............................. CMP `211.
Disclaimer : Above recommendations are based on various technical parameters and any fundamental input has not been considered for the recommendations. Follow strict stop loss for the recommendation.*LEGEND: n EMA - Exponential Moving Average. n MACD - Moving Average Convergence Divergence n RMI - Relative Momentum Index
n ROC - Rate of Change n RSI - Relative Strength Index(Closing price as of July 16, 2019)DSTechnicals Equity