Venky’s Stock prices are trending higher since 2015. Within a matter of 3 years, Share prices climbed from 210 to 4175, that’s more than 500% returns! Despite multiple corrections and retest, share prices managed to make higher highs because of renewed buying interest and momentum of in the stock. Richard Wyckoff would refer these types of trend as Mark-up.
Venky’s Price action Analysis in Weekly chart
The Structure of the Trend is clearly visible in Weekly chart. From 2017, upside rallies became even sharper, reflecting a euphoric behaviour of Market participants. From the perspective of Price action these types of movements are known as climatic pattern. Checkout the Price action from the beginning of 2017 – Share prices strongly rose from 375 – 2500. The trend we see in weekly chart is in place from last 3 years; hence it’s a Long term trend. Even a minor correction within the trend structure on weekly chart will be visible as a major movement in lower time frames.
Another distinctive factor is that sharp volume spike in July 2017. Such a heavy volume spikes technically show more public investors and weak hand players buying the stock. Increasing share prices are attracting more public participation. Large public participation is a bad sign for the trend. Even a small correction can set panic in stock prices.
What’s next for Venky’s? Given these technical factors, will the trend terminate? Or will the Share prices defy the odds to make new highs? Psychological round number 5000 can act like a potential resistance zone; Keep an eye on developing Price action at the level. Swing and positional traders can expect some potential trading setups. Focus on the trend and market movement in coming weeks.
