Monday, October 28, 2013

Hindalco: Why “Coalgate” SCAM did not help from trading perspective?

Hindalco has been in news for over past few weeks with regards to “CoalgateSCAM.

Trading based on simply news can be very challenging. On 21st October following news was announced – 
Hindalco Industries Ltd (HALC.NS) gain as much as 4.3 percent after Prime Minister Manmohan Singh's office says he is satisfied with the outcome of the process of allocating coal blocks to certain companies, dealers say.

The stock in today’s trading session is down by almost 2% and way down from 120 levels when the news was announced. Looking at the below chart it is difficult to even say that either positive or negative news has impacted the stock let alone trading based on news.
Hindalco 120 mins chart:

The above chart and below explanation is picked up from “The Financial Waves” short term update research report published on daily basis.

Wave Analysis:

Metal Index is one of the indices which started to outperform the market from the start of August 2013. During August we have witnessed one of the major downside corrections of 2013 in markets. However, during that period this index started to move higher. During this run up, Hindalco went up from 85 to 125 levels. However, from the mid September 2013, prices were consolidating between 125 and 110. Recently, it has breached important support of 110 and closed below that, which indicates ……

As per wave perspective, from the start of 2013 prices have been trading in flat correction pattern as primary wave B has retraced more than 61.8% of primary wave A. The break below 110 indicates that primary wave C has started on downside which can move at least towards ……..

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