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Is TCS a buy?

 

 

 

One of our readers emailed us about TCS..whether it is still a good buy? Here is a chart of TCS.

TCS gapped up in mid October indicating strong bullish force. After bulls ran out of steam, the stock pulled back to test the 50sma. The 50sma had historically been acting as support in recent times. The formation of a Bullish Harami right on this technically significant support, along with stochastics in oversold condition, provided a high probability bullish scenario to play for the long side. Notice that since this reversal, almost all candles are bullish in nature (though the stock might have ended down on any of those days). However, on Friday the stock exhibited a Shooting Star candlestick signal at the same level it reversed in early November with a Doji. This is not something you want to see if you are a bull.

So here is the analysis:

1. If you bought the stock on confirmation of the Bullish Harami, you should take some profits off the table at this resistance point. Watch next to see if the stock can decisively close over the resistance shown below.

2. If you are planning to buy it, then wait for a decisive close over the resistance level.

3. Shorting is not recommended at this point since the stock is in bull mode. (keep in ind that just because a stock does not look good to buy or hold, does not mean it is good for shorting)

Chart courtesy icharts.in