Bata India: Is it time for reversal or trade on short side?

Bata India had lost substantial value from its high. But was there a way to know it back then? Absolutely Yes, we turned bearish on this stock when it started making lower high lower low pattern after making a high near 1115 levels.

We have sufficient proofs in form of research reports that can be referred why we turn bullish or bearish based on Elliott wave counts. You also have the opportunity to learn this Elliott wave, Neo wave theory. See here

Below is the hourly chart of Bata India showing a detailed analysis using Channels, Elliott wave technique and Moving averages.

Bata India 60 mins chart:(Anticipated as on 8^th October, 2018)

                    
Bata India 60 mins chart:(Happened as on 23^rd October, 2018)

 

(Below is the gist taken from our equity research report published on 08^th October, 2018)

Elliott Wave analysis:

Bata India post completing its impulsive rise near all time high level of 1115, stock then underwent selling pressure and has failed to show sign of retracement of its current fall which indicates the top is now in place.

As shown on weekly chart, prices made the biggest red bar in the previous week and retraced more than 61.8% of its prior rise. Stock corrected by almost 10% in a week time indicating strong grip of bears. Further we can expect a move towards lower levels near 840 in upcoming trading sessions which is 76.4% retracement of the previous rise.

As shown on hourly chart, prices are forming Complex Correction pattern in which wave a is completed on downside near 850 levels and wave b is ongoing. We can use the strategy of selling on rise near channel resistance as prices are moving in form of wave b and we can further capture the move on downside near 840 levels in form of wave c. On upside one can use upper trendline or 50-period EMA as immediate resistance.

In short, trend for Bata India is bearish. Any pullback near can be used as shorting opportunity for a move near 840 levels.

Happened: “We can use the strategy of selling on rise near channel resistance as prices are moving in form of wave b and we can further capture the move on downside near 840 levels in form of wave c.”BANG ON! Prices have behaved as expected giving a rise towards its Channel resistance trendline and then witnessing a fall taking the prices lower towards 840 levels in form of wave c.

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