After a protracted period of consolidation, the Liberty Shoes stock appears to be gaining some upside momentum. The recent price and volume action suggests that there is buying interest in the stock. As highlighted in the weekly chart of Liberty Shoes featured below, the stock has bounced off the blue trend line and has since seen a sharp bounce.
The stock appears to be headed to the immediate resistance at Rs.116-117 range. A breakout past this resistance could push the price to higher levels. We expect Liberty Shoes to eventually rally to Rs.183, which is the 50% retracement of the fall from Sept.2005 high of Rs.289.95 to the Oct.2008 low of Rs.32.30.
A breakout past the immediate resistance at Rs.117 would strengthen the case for a move towards Rs.183. This target of Rs.183 is meant for those who are willing to play the waiting game as itt may take a few months or even beyond for the stock to reach this target.
The positive view would be invalidated if Liberty Shoe falls below the support at Rs.88. With the stock currently ruling at Rs.102, the stop loss at Rs.88 would be too rich for comfort. Investors may therefore accumulate the stock on weakness, so that the net risk on the trade is within acceptable limit.
(The view featured here is based on Technical Analysis of historical stock price action. Please read the Disclaimer)
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Rally started ? Can I take position now ?
Hi Sagar,
We would discourage investors from chasing price. It would invariably be a losing proposition or will lead to a inferior trade entry or you may have to compromise on stop loss. The stock corrected all the way back to Rs94-95 range last week which is where would like investors to pounce on the opportunity.
WE had clearly mentioned in the copy that buy on dips would be a safer strategy in order to minimise risk. The game is all about minimising risk and increasing the returns.
Hope this helps.
Regards
B.Krishnakumar
Hi Krishna,
Liberty shoes run faster 30% in <30days, can we book now and enter later OR hold for higher target?
Hello:
We stick to our target of Rs.183 from a medium to long term perspective. You may push the stop loss now to Rs.114. The current market price is Rs.135+. If you feel uncomfortable placing the stop loss at Rs.114, then take the profits and celebrate Christmas / new year.
If you are wanting to play for the Rs.183 target, then you may have to digest this trailing stop loss at Rs.114.
Regards
B.Krishnakumar
FundsIndia
I bought it @101 and sold @121 on 23/12. Only if I had come across this analysis I would not sold it. What should be the right price to reenter. Any ranges?
Hi Abhiskek:
AS you must have realised reading our earlier posts, we typically discourage investors from chasing price. We would prefer to buy when the stock is in a counter-trend corrective move. The recent spurt has pushed the price closer to our target price of Rs.183. Hence, we would not recommend a buy at these levels. Please wait for a correction and try to enter at lower levels. If not, look for some other opportunity.
Regards
B.Krishnakumar
Mr Krishnakumar,
Thanks for your answer. I was also thinking on the same line i.e. to enter on corrections.
What are your views or analysis on L&T Finance?
Hi Krishna,
Whats your current view on Liberty?
Do you see previous lifetime high (326) as resistance?
I bought it @101 and sold @121 on 23/12. Only if I had come across this analysis I would not sold it. What should be the right price to reenter. Any ranges?
Hi Abhiskek:
AS you must have realised reading our earlier posts, we typically discourage investors from chasing price. We would prefer to buy when the stock is in a counter-trend corrective move. The recent spurt has pushed the price closer to our target price of Rs.183. Hence, we would not recommend a buy at these levels. Please wait for a correction and try to enter at lower levels. If not, look for some other opportunity.
Regards
B.Krishnakumar
Mr Krishnakumar,
Thanks for your answer. I was also thinking on the same line i.e. to enter on corrections.
What are your views or analysis on L&T Finance?
Hi Krishna,
Liberty shoes run faster 30% in <30days, can we book now and enter later OR hold for higher target?
Hello:
We stick to our target of Rs.183 from a medium to long term perspective. You may push the stop loss now to Rs.114. The current market price is Rs.135+. If you feel uncomfortable placing the stop loss at Rs.114, then take the profits and celebrate Christmas / new year.
If you are wanting to play for the Rs.183 target, then you may have to digest this trailing stop loss at Rs.114.
Regards
B.Krishnakumar
FundsIndia
Hi Krishna,
Whats your current view on Liberty?
Do you see previous lifetime high (326) as resistance?
Rally started ? Can I take position now ?
Hi Sagar,
We would discourage investors from chasing price. It would invariably be a losing proposition or will lead to a inferior trade entry or you may have to compromise on stop loss. The stock corrected all the way back to Rs94-95 range last week which is where would like investors to pounce on the opportunity.
WE had clearly mentioned in the copy that buy on dips would be a safer strategy in order to minimise risk. The game is all about minimising risk and increasing the returns.
Hope this helps.
Regards
B.Krishnakumar