Blog posts of '2024' 'September'

Stock name: Alkyl Amines Chemicals Ltd.

Pattern: Triple Bottom Pattern and retest

Time frame: Daily

Observation:

As discussed in the previous blog (link to the blog), the stock has formed a triple bottom pattern on its daily chart. The stock has registered a breakout at the start of September 2024. Post breakout the stock has moved in the upward direction for a period and then seen retest. On 18th September 2024, the stock has seen a good rebound with high volumes. This strong upward movement has helped the stock maintain the breakout level, and it may see continued bullish momentum. It's advisable to look for additional confirmations, such as RSI levels and the MACD indicator.

You may add this to your watch list to understand further price action.

Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.

Stock name: Nuvoco Vistas Corporation Ltd.

Pattern: Inverse head and shoulder pattern

Time frame: Daily

Observation:

Since its 2021 listing, the stock had been in a downtrend but recently stabilized. From July to September 2024, it formed an inverse head and shoulders pattern on its daily chart. A breakout occurred on 17th September 2024, supported by strong volume. If the stock maintains this momentum, technical analysis suggests it could see further upward movement. It's advisable to look for additional confirmations, such as RSI levels and the MACD indicator.

You may add this to your watch list to understand further price action.

Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.

Stock name: Century Plyboards (India) Ltd.

Pattern: Cup and handle

Time frame: Daily

Observation:

As discussed in the previous blog (link to the blog), the stock has formed a cup and handle pattern on its daily chart. It broke out on 26th August 2024 and has been trending upward since then. On 17th September 2024, the stock experienced a significant surge, rising nearly 10% in a single day along with a massive volume. The stock has also broken past the previous ATH with this candle. This strong upward movement suggests that the stock may see continued bullish momentum. It's advisable to look for additional confirmations, such as RSI levels and the MACD indicator.

You may add this to your watch list to understand further price action.

Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.

Stock name: Oil & Natural Gas Corporation Ltd.

Pattern: Double top pattern

Time frame: Daily

Observation:

The stock has shown good upward movement following the post-Covid market crash. Between July 2024 and September 2024, it formed a double top pattern on its daily chart. A breakout in the downward direction occurred around 9th September 2024, after which the stock continued to decline with significant volume. Based on technical analysis, if the current momentum persists, the stock may experience further downward movement. It's advisable to look for additional confirmations, such as RSI levels and the MACD indicator.

You may add this to your watch list to understand further price action.

Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.

Stock name: Bayer Cropscience Ltd.

Pattern: Resistance breakout

Time frame: Weekly

Observation:

The stock reached a previous high in September 2020 and later consolidated, facing strong resistance around the 6200 level. In June 2024, it broke through this resistance with strong volume, moving upward before retesting in August. The stock rebounded from the retest with good volume, and based on technical analysis, if it maintains its current momentum, it may continue moving higher. It's advisable to look for additional confirmations, such as RSI levels and the MACD indicator.

You may add this to your watch list to understand further price action.

Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.

Stock name: Laxmi Organic Industries Ltd.

Pattern: Falling wedge pattern

Time frame: Weekly

Observation:

The stock had been trending downward since September 2021 and eventually formed a falling wedge pattern on its weekly chart. In August 2024, it broke out of this pattern with strong volume and an upward movement. According to technical analysis, if the stock can maintain its current momentum, it may continue to rise further. It's advisable to look for additional confirmations, such as RSI levels and the MACD indicator.

You may add this to your watch list to understand further price action.

Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.

Many companies are now announcing share buybacks, and to understand this trend, we first need to know what a buyback is. A buyback refers to a company purchasing its own shares from shareholders. These companies, listed on the stock market, offer to buy back shares from investors, often at a price higher than the market rate. In return, shareholders receive cash for the shares they sell.

Now a question may flock into your mind that why does a company come up with buyback?

Companies resort for a buyback for many reasons. However, there are two big reasons in most cases

1. Companies with excess cash can spend it to buy their shares back which improves the investor confidence in the company
2. They want to reward existing shareholders for their trust in the company When the company feels that that their shares are undervalued, a buyback can boost their value.
3. When the company feels that that their shares are undervalued, a buyback can boost their value.

The question still remains unanswered that why is that now so many companies are coming up with buybacks?The reason is Budget 2024 presented in Jul’24 which changed the way buybacks are taxed, before the budget, companies used to pay a 20% tax when they buy back their shares. But from October 1st, this tax has to be borne by shareholders and not the company. In fact, the entire proceeds received from buyback will be treated as a dividend income.Let us understand this by way of an example, let us assume that Mr. Chandu is a wealthy person and falls in the highest tax bracket and Mr. Bandhu is a middle-class person and falls in 10% tax bracket, now let us understand the impact of this change on both of them.
In case of Mr. Chandu, the tax is more as compared to the tax applicable to the company, however the tax is lesser in case of Mr. Bandhu.

As you can see how the new buyback tax rules are unfavourable for high-income investors, increasing their tax burden by about. On the flip side, low-tax bracket investors benefit making buybacks more attractive for them.

And this effectively means that the new tax rule will be hurting the higher-income shareholders the most, with the top shareholders like promoters and big investors of companies getting taxed at a higher rate. And that would also make companies prepone their buy back plans, if any, before October.

In order to avoid higher taxes for their most valued shareholders, and bring in more shareholder value when they can, companies are trying all they can to complete their buybacks before October.

Now, if you have carefully read till now, you would have noticed that the buyback receipt will be taxed as dividend, now a natural question arises is what will happen to the purchase price of these shares, this cost would be considered a loss. You can adjust it against your other capital gains to lower your taxable income.

For example, if you have a capital gain of ₹60,000 in the same year, you won’t pay any tax on that gain since it’s offset by the ₹1,00,000 capital loss from the buyback and the remaining ₹40,000 loss can be carried forward and used to offset future gains for up to eight years until it’s fully utilised.

This new rule would may also encourage companies to pursue buybacks only when they feel that their shares are genuinely undervalued.

Stock name: Prism Johnson Ltd.

Pattern: Cup and handle pattern

Time frame: Daily

Observation:

According to the TA blog from September 5, 2024 (link for reference), the stock formed a cup and handle pattern on its daily chart and registered a breakout on September 3, supported by strong trading volume. After the breakout, the stock briefly retested the breakout level but rebounded sharply on September 10 and 11. Between September 5 and 11, 2024, the stock surged over 25%.

You may add this to your watch list to understand further price action.

Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.

Stock name: Cyient Ltd.

Pattern: Flag and pole pattern

Time frame: Daily

Observation:

The stock experienced a strong rise in August 2024, stabilizing from August 21. This created a flag and pole pattern on its daily chart, followed by a breakout on September 11, 2024, backed by high trading volume. The next candle confirmed the breakout, and if the stock sustains this momentum, it may see further upward movement according to technical analysis. It's advisable to look for additional confirmations, such as RSI levels and the MACD indicator.

You may add this to your watch list to understand further price action.

Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.

Stock name: AU Small Finance Bank Ltd.

Pattern: Double bottom pattern

Time frame: Daily

Observation:

The stock experienced a downward trend in January 2024, later forming a double bottom pattern on the daily chart. It broke out of this pattern in early September 2024 and has been moving upward since. If the breakout momentum holds, technical analysis suggests the stock may continue to rise further

It's advisable to look for additional confirmations, such as RSI levels and the MACD indicator.

You may add this to your watch list to understand further price action.

Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.

Stock name: Usha Martin Ltd.

Pattern: Parallel channel pattern

Time frame: Daily

Observation:

The stock has been trading within a parallel channel on its daily chart for an extended period. In August 2024, it touched the channel's support line and managed to stay within the pattern. After moving along the support line for a few sessions, the stock gained upward momentum, backed by substantial trading volume. According to technical analysis, if this momentum persists, the stock may see further upward movement. It's advisable to look for additional confirmations, such as RSI levels and the MACD indicator.

You may add this to your watch list to understand further price action.

Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.

Stock name: Alkyl Amines Chemicals Ltd.

Pattern: Triple bottom pattern

Time frame: Daily

Observation:

The stock experienced a downward trend since 2021 but stabilized in March 2024, forming a triple bottom pattern on the daily chart. In the first week of September 2024, it broke out of the pattern, supported by strong trading volume, and began moving upward. As per technical analysis, if the stock can sustain this momentum, it may see further upward movement. It's advisable to look for additional confirmations, such as RSI levels and the MACD indicator.

You may add this to your watch list to understand further price action.

Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.

Stock name: TVS Supply Chain Solutions Ltd.

Pattern: Inverse head and shoulders pattern

Time frame: Daily

Observation:

After its listing, the stock entered a downward trend. From January to September 2024, it formed an inverse head and shoulders pattern on the daily chart. On 5th September 2024, the stock broke out of the pattern with strong trading volume, and has since moved upward with continued volume support. If it maintains this momentum, technical analysis suggests that the stock may see further upward movement. It's advisable to look for additional confirmations, such as RSI levels and the MACD indicator.

You may add this to your watch list to understand further price action.

Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.

Stock name: Honasa Consumer Ltd.

Pattern: Cup and handle pattern and retest

Time frame: Daily

Observation:

Since its listing in November 2023, the stock has experienced upward momentum. From January 2024, it stabilized and formed a cup and handle pattern on the daily chart. A breakout occurred on 26 August 2024, supported by high trading volume. Though the stock has seen retest after the breakout, it was able to sustained the breakout level. In last 2-3 trading sessions, it has moved slightly higher. According to technical analysis, if the stock gains further momentum, it may continue its upward movement. It's advisable to look for additional confirmations, such as RSI levels and the MACD indicator.

You may add this to your watch list to understand further price action.

Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.

Stock name: SBI Cards and Payment Services Ltd.

Pattern: Double bottom pattern

Time frame: Daily

Observation:

The stock had been in a downtrend for some years now. It has stabilized between January and September 2024, forming a double bottom on its daily chart. It broke out from this pattern on 03 September 2024 with significant volume. A subsequent confirmation came with a strong green candle and higher volume. If the stock maintains its current momentum, it may continue to rise further according to technical analysis. It's advisable to look for additional confirmations, such as RSI levels and the MACD indicator.

You may add this to your watch list to understand further price action.

Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.

Stock name: Gujarat State Petronet Ltd.

Pattern: Resistance breakout

Time frame: Weekly

Observation:

The stock has faced strong resistance around the 380 level since August 2021. Between February and April 2024, it attempted to breach this resistance but failed, strengthening it further. However, towards the end of August 2024, the stock successfully broke through with high trading volume, and the following week's candle confirmed the breakout. According to technical analysis, the stock may continue moving upward if it maintains this momentum. It's advisable to look for additional confirmations, such as RSI levels and the MACD indicator.

You may add this to your watch list to understand further price action.

Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.

Stock name: Aavas Financiers Ltd.

Pattern: Double bottom pattern and retest

Time frame: Weekly

Observation:

The stock experienced a downward trend starting in January 2022. Between April 2023 and June 2024, it formed a double bottom pattern on the weekly chart, followed by a breakout in June 2024. After an initial upward move, the stock retested the breakout level immediately. In the month of September, the stock has rebounded with strong volumes. If the current momentum holds, the stock may see further upward movement according to technical analysis. It's advisable to look for additional confirmations, such as RSI levels and the MACD indicator.

You may add this to your watch list to understand further price action.

Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.