A new trading idea 📈📉

In this blog, we will be discussing about a stock which came across me while I was screening. We will discuss how does it look in different timeframes along with a little analysis of its industry as well. 

Idea - Plan - Action

But, I would like to start with a disclaimer to make things really clear.

This is just an idea. Not a trading recommendation. Its not even suitable for entry yet. I'm just sharing this so that you can keep it in your watchlists and track it. To put things formally, I'm no SEBI registered analyst. This blog is meant for educational purposes only. 

If you're trading just because someone is saying so, trust me you aren't ready for markets yet. Anyone can be wrong anytime. Markets are completely random and unpredictable. Hence, always trade with proper risk management and position sizing because they are the real holy grail of stock market trading. 

Now, with things crystal clear, lets begin :-

The stock which came across me is Indian Hotels :-

Daily chart of Indian Hotels

• At first glance, looks like a decent chart which has been in an uptrend in daily time frame. 

• However, it has now been consolidating for almost five or six months. 

Now, lets dive deeply into some observations that I was able to make :-

#1 200 ema in daily time frame

200 ma daily time frame

• We can notice that the stock bounces off pretty nicely whenever it touches or comes closer to the 200 exponential moving average in daily time frame.

•  It has done the same 4 times so far. Does it look like it would do it again?

#2 Trendline support in weekly time frame

Trendline support weekly time frame

• We can see that the stock has been religiously following this trendline since a long time and has bounced from the same five times in the past 18 or so months. 

• Will it take support from this trendline once again or this time we will see a breakdown?

#3 Bullish weekly candle on trendline support

Bullish weekly candle

• Have a look at the last weekly time frame candle (I've marked it too). It closed pretty strong and had a long upper wick. 

• This shows that the buyers are being aggressive to buy near this trendline. 

• It adds to the conviction. Will it rise up more from here?

#4 Trendline rejection in weekly time frame

Trendline rejection 

• We can see that Indian hotels has been rejecting from this trendline in weekly time frame multiple times. 

• It has rejected 5 times so far and is now lying exactly below it. 

• Will it be able to give a breakout from this trendline this time or will it reject again causing more downside?

#5 Favorable volume action

Volume action

• We can see that in weekly time frame, Indian hotels is going up with higher volumes and coming down with lower volumes. 

• This confirms that the uptrend is pretty good and solid. In the recent consolidation too, the volumes have dried up really well which might mean that the sellers have been reducing and the number of people who want to hold it are increasing. Will that continue in the coming future?

#6 A volatility contraction recently in daily time frame

VCP in daily time frame

• In the daily time frame chart of Indian hotels, we can see that the volatility of the price has been decreasing in the recent times as the lows made are getting higher and higher. 

• This also shows that the buyers are getting more and more aggressive to buy the company. Will this continue?

Talking about the sector a little bit, I was recently reading that the occupancy rates of hotels have been high recently due to big events like G20, IPL & Cricket world cup which are coming up. Looking at peers and analysts, the outlook for the hotel industry remains positive. Lets see. 

And.. that's it!

These are the things I could observe.   

Did I miss anything?

Please let me know in the comments below :)