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Stuck with ITC? Here's why the stock is a tough bet to play

ITC can continue to meander in a range of Rs 220–200 for now and positive traction can be witnessed on this stock post July 14. Read on to know what changes in July that can trigger an up move in the stock

June 08, 2021 / 12:54 PM IST
 
 
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ITC stock has been a major underperformer since March 2021.

There have been many memes circulating with ITC being labelled as an “immovable asset”. It is interesting to see that so many investors or traders are now stuck in this stock and it is simply testing their patience.

It is best to apply Time Cycles to understand the possible reversal dates and also the probable pattern under formation in the stock.

Below is the chart of ITC with Hurst’s Time Cycles

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We can clearly see that the stock is forming classic lows near around 55 days Hurst’s Time cycle and reversing back on upside from there. Since March 2021, majority of the lows are around this cycle dates.

However, the desired momentum is not seen. As of now we can see that the stock is now moving to the second half of the cycle which is usually the sell mode. The chances getting bleak for the stock to rally with each passing day until the next cycle low kicks in which is likely only post 14th July 2021.

This means that there is high probability traders and investors who are stuck in ITC might have to wait for more than a month before some action starts. Also, the overall pattern is also forming the shape of topping Head & Shoulder with neckline near 200 levels. Any breach below it might result into panic among traders and there can be some serious selloff that can then kick in until July 14.

For any momentum to gather on upside we need to see the stock breaking above Rs 220 decisively with strong momentum but with cycle entering into the sell mode it might be tough bet to play with.

In a nutshell, ITC can continue to meander in a range of Rs 220–200 for now and positive traction can be witnessed on this stock post July 14, 2021. Traders or investors should be careful once Rs 200 is taken out as that can kick in real panic across.

The author is Founder/CEO, Waves Strategy Advisors

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Ashish Kyal is Founder of wavesstrategy.com and Trading Gurukul. Follow on Twitter @kyalashish and YouTube channel @kyalashish
first published: Jun 8, 2021 12:54 pm

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