After a rally in the first quarter, German Remedies' stock had entered into corrective phase during the month of May. It had fallen from Rs 500 to Rs 278. However, since then the stock has been an upswing and recorded an impressive jump of more than 100 per cent within a period of less than four months, touching a high of Rs 549.While the stock has been touching new highs everyday, the average trading volumes have shown a decline. Besides falling volume, the oscillators have also formed a negative divergence. The RSI oscillator has formed lower tops. Even in the weekly charts, RSI as well MACD have shown similar trend. These divergences are nothing but an indication towards the falling strength of ongoing bullish trend.
The moving averages however are still in positive phase and yet to show any weakness. As such, considering the position of volumes, oscillators, and averages, profit booking, at least partially is recommended. Re-entry can be considered at lower levels.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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