Has Bharti Airtel bottomed out at 322.60?

Recently, our Indian stock markets witnessed a very sharp fall in many telecom stocks namely, Rcom, Bharti Airtel, Idea cellular, etc. Various reasons ranging from reduced tariffs to allegations of inflated revenues to cancelled merger deals, were cited as the reason for the fall.

Bharti Airtel, for one, lost about 30% in jus about a fortnight and approx 40% in a months time. Now that it is moving in a consolidated phase, within a narrow range, one question that comes to my mind is "Has Bharti Artl bottomed out at 322.60, which was the swing low on 16/10/2009?"

I think "Yes". Have a couple of reasons to think so. For one, after the steep fall, on daily charts, Bharti seems to be in a consolidated phase. Before any major change in a continuing trend, stocks or derivatives mostly go into a phase of lag, where further losses cease, nor any gains are foreseen.

Second, it formed a doji on 16/10/2009, add to it, it was also swing low. Since then, all trading sessions have witnessed a breach of prev days high, a fall in volumes from where the down fall began, which according to me implies that bears have stopped shorting further followed by a marginal increase in volume which I believe is an indicator of short coverings as well as new longs. All compiled suggest a positive trend in the making.

Also, I believe, that Bharti Artl, on a weekly basis, is trading very close to a year long trendline as well as its 200 DMA, which may act as a strong support. This apart, on weekly charts, the MACDh suggests an exhaustion of the down move.

Thus I conclude, if I have to go long in Bharti, my near term tgt for it would be 388.85 with a stop loss placed at 318.25

Happy Trading !!








Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.