Today, we present a stock that we believe has formed a bottom. It gives a possibility of both significant medium to long term gains.We tend to think that any negative developments have already been discounted by yesterday’s price action and the last 5 month-old downtrend that almost halved its price.
Fortis Healthcare (141.55); NSE Code: FORTIS, BSE Code: 532843
This stock nosedived in yesterday’s on record volume of 47,735,740 shares at the NSE and touched a low of 125.55 before closing at 144.40. In the process, it came very close to its almost a decade old long term uptrend-line (see the image below).
The significant technical feature of the price action yesterday is as follows:
- It has shown a panic volume: such a figure was volume was never seen since its listing.
- It has shown such huge dip after a 5-month long downtrend that began from its all-time high.
- In the process, it came very close to its almost a decade old long term uptrend-line.
- It closed near the day’s top forming not just a wide-ranging day but also a huge hammer-line both indicating a major bottom formation.
We expect it to test the potential supply zone between 164 and 177 in the near term. Over the long term—a period of one year or more—we expect it to cross the erstwhile high of 228.95 recorded earlier this year. Our one-year target for this stock is 238. Its potential target zone for the next couple of years would be the range between 305 and 325.
As a matter of abundant caution, please put a stop below 115 on closing price basis for any position you take in this stock.
Note: Please act on this recommendation at your own risk. Since it is a technical recommendation, the stop-loss level should be adhered to though we tend to think that it is highly unlikely that it would get triggered.
