Tag Archives: L&T Trading Strategy

L& T Technical Analysis as on 26 Apr’13 – 1540.85

L&T as on 26 Apr'13 - 1540.85

L&T as on 26 Apr’13 – 1540.85

Larsen & Toubro Ltd is moving consistently moving higher after posting a bottom of 1313 on 9 Apr’13. In last 11 trading session L&T made a gain of more than 17%. Yes, whopping 17% gain. Lastly stand at 1540 reached near a point where multiple resistance pivots will come in play.

But, we should notice some important points here.

  • From beginning of 2012 L&T is making higher highs and higher lows.
  • After posting 1720 in end of Oct’12 prices were moving with weak bias, and lastly on 9 Apr’13 it made a low of 1313. This was loss of around 23% in more than 5 months. And we witnessed gains of 17% in matter of 11 trading sessions only.
  • As it is marked in attached chart, momentum oscillator RSI (14)  gave clear indication with forming Positive Divergence between price and oscillator. And lastly RSI (14) gave a minor Negative Divergence, but still it is very early to comment on it, as this divergence can be easily negated.
  • From last Monday onwards, prices are moving above its 200-day EMA, and with that prices also moved out from Falling Channel line.

From above observation, I sense that still there is scope for L&T to move higher, subject to, prices holds above this 1550 levels where multiple resistance comes as hurdle to prices, and according to my observation, Nifty and Bank Nifty may witness minor pullback in days to come. So it can be threat for L&T too. As long as L&T holds above 1490 level, I would like to maintain my bullish stance on it. Of course risk is involved, but if L&T holds above this level than it has potential to go much higher.

Alternatively, below 1490 prices may enter into consolidating phase and start weakening, but weakness will be confirmed below 1450 levels.

At this point in time, both possibilities have an equal chance to run its course. So we don’t have a choice, but to take risk or keep close eye on it.

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