BAJAJ Finserv: How to create wealth using technical analysis?

Bajaj Finserv is one of the outperformer within the finance sector. Many a time’s stock is fundamentally strong but has poor performance so it is important to identify outperforming stocks along with strong fundamentals for long term pick.

For understanding a particular stock performance technical analysis plays an important role, using techniques like Channels, Moving averages, Elliott wave counts etc.

Figure 1: Bajaj Finserv Ltd. weekly chart: (Anticipated on 5^th June 2016)

Figure 2: Bajaj Finserv Ltd. weekly chart - Happened

Below is the research published on 5^th June 2016:

Anticipated- As shown in the weekly chart, major bottom for this stock was formed in 2008 which was a black year for the Indian Equity markets. After such sharp fall this stock had the potential to fly and it rallied impulsively from there on. As per wave perspective intermediate wave [1] completed its course near the channel resistance and post that wave [2] completed its running complex correction W-X-Y near the channel support in year 2013. Post that prices bounced sharply suggesting that wave [3] is currently ongoing. The internal structure of the same suggests that recently minor wave II of the same has completed near the channel support and now minor wave III is into action. This rally should continue towards the resistance line near 5000. Now the outlook will remain positive for this stock as far as the channel support is intact and any dips towards the crucial support of 1800 - 2000 levels should be utilized as buying opportunity.

For Bajaj Finserv, in update dated 5^th June 2016 we mentioned that, “cluster of evidences like Elliott wave counts, moving average, Channeling technique which is working brilliantly we can see much higher levels Bajaj Finserv. This rally should continue towards the resistance line near 5000. Now the outlook will remain positive for this stock as far as the channel support is intact and any dips towards the crucial support of 1800 - 2000 levels should be utilized as buying opportunity.”BANG ON!!

Happened: As mentioned in our previous update on this stock, prices exhibited a sharp move on upside and has moved above our previous mentioned target of 5000 levels. It is interesting to see that Bajaj Finserv has provided more than 150% return.

When we recommended this stock it was in the category of Midcap and now the stock is included in Largecap and also in Nifty 50. This only shows how one can capitalize on the stock that can become Largecap from Smallcap to Midcap.

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