Technical Analysis

Chart Focus - Blue Star: Buy

Yoganand D | Updated on May 12, 2019 Published on May 12, 2019

Investors with a medium-term perspective can consider buying the stock of Blue Star (₹750.9) at its current levels. Since taking support at ₹135 in early 2014, the stock has been in a long-term up-trend. But the stock encountered a key resistance at ₹840 in early January 2018. The stock tested this resistance in April 2018 and began to decline.

It was then on a medium-term corrective downtrend until it found support at ₹507 in October last year. This decline retraced almost 50 per cent f the Fibonacci retracement level of the prior uptrend. Subsequently, the stock changed direction and resumed the long-term uptrend. Since October, it has been in a medium-term uptrend. Moreover, the short-term trend is also up for the stock.

Witnessing buying interest, the stock conclusively breached the significant medium-term resistance at ₹700 last week by gaining 7.6 per cent. This rally has strengthened the stock’s medium-term uptrend and it appears to have resumed the long-term uptrend. The stock hovers well above the 50- and 200-day moving averages. The daily as well as the weekly relative strength indices feature in the bullish zone, backing the uptrend. The daily and weekly price rate of change indicators hover in the positive terrain, indicating buying interest.

Overall, after the break-out of the key barrier, the momentum is bullish for Blue Star, and the medium-term outlook is also bullish. The stock can continue to trend upwards and reach the price targets of ₹800 and ₹850 with a minor pause at around ₹800. Traders with a medium-term view can buy the stock with a stop-loss at ₹700.

Published on May 12, 2019

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.