HUL most Trusted Brand!
On 27th Nov 2015, HUL brands were shining in Nielsen’s Most Trusted Brands survey. On that day, the stock price was quoting at Rs.820.
Good news followed on 17th Dec 2015 when HUL signed an agreement with Mosons Group for the acquisition of its flagship ‘Indulekha’ brand. Leading brokerage houses repeatedly gave buy recommendations. Because of this good news, the stock price soared to Rs.875 on 18th Dec 2015. Whopping 6.7% gain from 17th November to 18th December.
The general sentiment is that FMCG Sector stocks will be capable of handling market bearishness. They will be the darling of investors during the downturn of the market. After 18th December, buy-rating from brokerage houses, good news, and positive sentiments were not able to protect the bear attack on HUL stock as shown in the chart.
(Click to enlarge)
As per my analysis, the stock is going to make new 52 weeks low and the possible pit stop would be @732. If the stock is unable to attract bulls, bears will make sure that the ticker will read 655.
A large number of retail investors usually sell their holdings in the panic on the negative news which generally flows after a fall in price.
As per legendary investor Warren Buffet, one should actually be buying when there is blood on the street instead of following experts blindly.
Current market price is 791.75 and if our analysis is respected by followers of Technical analysis, we expect 5%- 15% corrections in the stock.
People who trade in derivatives can use pullback rally (if any) towards 799-814 (cash market price) to enter during bearishness of the stock with the moderate risk-reward ratio. The position can be rolled over till the chart indicates the end of bearishness with predetermined loss level of 839.
Like any other analysis, this analysis may go wrong. Hence it’s important to keep risk in control and maintain a strict stop loss.
Note that investments in the stock market involve risk. Consult your financial adviser to take action based on the views presented here.
Information presented in the above article is available in public domain and it should not be treated as “Research Report”
Registration Status: I am not a SEBI registered Research Analyst.
As per SEBI (RESEARCH ANALYSTS) REGULATIONS, 2014 and clarifications provided by SEBI
“Any person who makes the recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations.”
Disclaimer: I do not hold any positions in HUL.