Why Raymond shares are showing 35% fall today; what lies ahead?

 Raymond opened at Rs 1,906 on NSE, down 39.60% over its previous day's closing of Rs 3,156

Shares of Raymond Ltd nosedived 40 per cent at open on Thursday, as the stock turned ex-date for the demerger of lifestyle business of the company. The stock was trading at a value, excluding the lifestyle business. The demerged business has been separated and would now be listed separately on stock exchanges around August-September. Existing investors of Raymond would be offered four shares of Raymond Lifestyle for every five Raymond shares. Today is the record date for the same.

Let us look at the chart of Raymond and see the overall trend

Raymond Daily chart:

Raymond chart shows classical channelling technique that has worked out extremely well.

We can clearly see that the stock touched the upper end of the channel just before it goes ex-date.

For technical traders, they have to now adjust the past price and divide it in the ratio to adjust for the prices difference of 35%.

This will ensure the correct application on the charts.

Traders should not see this as a crash in stock prices but the fall as a result of corporate action.

The overall trend for the stock still remains positive and the low of today near 1852 is important support.

Time cycle of 55 days – is working very well and most of the lows are formed near this time cycle. The next date as per this cycle is on 23^rd August 2024 which will provide to enter into the stock from medium to long term perspective.

In a nutshell, trend for Raymond is still positive and the fall of 35% seen on 11^th July 2024 is just because of corporate action for which the traders will get the shares of demerged entity. Application of Time cycle can provide classic opportunity to enter the stock again.

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