Global Education - Study and analysis
Good morning,
We are going to talk about #Globaleducation this share have generated amazing returns in past couple of months and continuing rising high.
Recently this stock have created double bottom and retesting and witnessed rejection from its neck line on the other hand we are monitoring every 4 bars from its previous high that is playing an important role on breakout level, Monday 08/01/24 might be a good as we have seen retesting from the neckline and 4 bar will be creating on the same day.
Let's discuss what is double bottom and how it works..
The double bottom occurs at the end of a downtrend. As the price action moves lower, printing the lower highs and lower lows, the price rebounds higher before returning lower again to retest the previous low.
As the basic rule of the technical analysis says that the twice-touched low becomes a support level, the sellers are unable to print a new low, below the previous low, which provides the buyers with an opportunity to push the price higher. As a result, we have two lows - two bottoms - that resemble the letter “W”.
On the other hand, the highest point of the rebound following the first bottom is considered to be the trigger for the pattern. A horizontal line is drawn at the highest point of a rebound, called the “neckline”.
Given that it’s almost impossible to get two bottoms at the exact same price, as long as these two lows are at a similar price, it is considered to be enough for the validation of a pattern.
Since the pattern is initiated by the downtrend and finalized in an uptrend, the double bottom pattern is considered to be a bullish reversal pattern. The pattern becomes active once the price action breaks above the neckline. As such, the price action shifts from the situation where it creates the lower lows and lower highs, to a situation where it initiates a trend of the higher lows and higher highs.
It is generally considered that two consecutive bottoms with a short duration in between their creation can be problematic, as this means that the downtrend is very strong, thus, the prevailing bearish trend is likely to continue. For this reason, the most effective double bottom patterns are those with a certain amount of time in between two lows.
Strengths and Weaknesses
A double bottom pattern is one of the strongest reversal patterns out there. Since it consists of two bottoms, it’s not a very common pattern. Still, once identified, the pattern is very effective in predicting the change in the trend direction.
Its greatest strength is that it offers clearly defined levels to play against. The neckline marks the risk and it helps determine the take profit once the pattern is activated. Hence, the correct drawing of the double bottom is very important.
The key limitation of the double bottom pattern is that it is a contrarian strategy. Don’t forget that the overall trend is bearish and we are playing the “long” trade here. Hence, the risk is always that the market will continue moving in the same direction. For this reason, it is important to consult supporting factors in the context of other technical indicators before entering the market
Key levels are given in chart for swing trade global Education can be a good stock keeping 10 rs Stoploss and 30 rs target looks attractive if neckline becomes weak and a red candle closed below it , then swing traders may leave the trade however long term investors can continue to be a part of it and monitor it until 280Rs.. Since Rs- 280 is the zone where it is taking strong support..
Market Cap
₹ 646 Cr.
Current Price
₹ 317
High / Low
₹ 345 / 136
Stock P/E
20.5
Book Value
₹ 38.4
Dividend Yield
0.95 %
ROCE
54.3 %
ROE
40.5 %
Face Value
₹ 5.00
PROS
Company is almost debt free.
Company is expected to give good quarter
Company has delivered good profit growth of 29.0% CAGR over last 5 years
Company has a good return on equity (ROE) track record: 3 Years ROE 26.6%
Company has been maintaining a healthy dividend payout of 38.4%
Debtor days have improved from 130 to 84.3 days.
Company's working capital requirements have reduced from 275 days to 125 days
CONS
Stock is trading at 8.26 times its book value
Imp note - This idea is only for educational purpose investors are advised to get in touch with their financial advisor before taking any trade based.
#GLOBALEDUCATION
We are going to talk about #Globaleducation this share have generated amazing returns in past couple of months and continuing rising high.
Recently this stock have created double bottom and retesting and witnessed rejection from its neck line on the other hand we are monitoring every 4 bars from its previous high that is playing an important role on breakout level, Monday 08/01/24 might be a good as we have seen retesting from the neckline and 4 bar will be creating on the same day.
Let's discuss what is double bottom and how it works..
The double bottom occurs at the end of a downtrend. As the price action moves lower, printing the lower highs and lower lows, the price rebounds higher before returning lower again to retest the previous low.
As the basic rule of the technical analysis says that the twice-touched low becomes a support level, the sellers are unable to print a new low, below the previous low, which provides the buyers with an opportunity to push the price higher. As a result, we have two lows - two bottoms - that resemble the letter “W”.
On the other hand, the highest point of the rebound following the first bottom is considered to be the trigger for the pattern. A horizontal line is drawn at the highest point of a rebound, called the “neckline”.
Given that it’s almost impossible to get two bottoms at the exact same price, as long as these two lows are at a similar price, it is considered to be enough for the validation of a pattern.
Since the pattern is initiated by the downtrend and finalized in an uptrend, the double bottom pattern is considered to be a bullish reversal pattern. The pattern becomes active once the price action breaks above the neckline. As such, the price action shifts from the situation where it creates the lower lows and lower highs, to a situation where it initiates a trend of the higher lows and higher highs.
It is generally considered that two consecutive bottoms with a short duration in between their creation can be problematic, as this means that the downtrend is very strong, thus, the prevailing bearish trend is likely to continue. For this reason, the most effective double bottom patterns are those with a certain amount of time in between two lows.
Strengths and Weaknesses
A double bottom pattern is one of the strongest reversal patterns out there. Since it consists of two bottoms, it’s not a very common pattern. Still, once identified, the pattern is very effective in predicting the change in the trend direction.
Its greatest strength is that it offers clearly defined levels to play against. The neckline marks the risk and it helps determine the take profit once the pattern is activated. Hence, the correct drawing of the double bottom is very important.
The key limitation of the double bottom pattern is that it is a contrarian strategy. Don’t forget that the overall trend is bearish and we are playing the “long” trade here. Hence, the risk is always that the market will continue moving in the same direction. For this reason, it is important to consult supporting factors in the context of other technical indicators before entering the market
Key levels are given in chart for swing trade global Education can be a good stock keeping 10 rs Stoploss and 30 rs target looks attractive if neckline becomes weak and a red candle closed below it , then swing traders may leave the trade however long term investors can continue to be a part of it and monitor it until 280Rs.. Since Rs- 280 is the zone where it is taking strong support..
Market Cap
₹ 646 Cr.
Current Price
₹ 317
High / Low
₹ 345 / 136
Stock P/E
20.5
Book Value
₹ 38.4
Dividend Yield
0.95 %
ROCE
54.3 %
ROE
40.5 %
Face Value
₹ 5.00
PROS
Company is almost debt free.
Company is expected to give good quarter
Company has delivered good profit growth of 29.0% CAGR over last 5 years
Company has a good return on equity (ROE) track record: 3 Years ROE 26.6%
Company has been maintaining a healthy dividend payout of 38.4%
Debtor days have improved from 130 to 84.3 days.
Company's working capital requirements have reduced from 275 days to 125 days
CONS
Stock is trading at 8.26 times its book value
Imp note - This idea is only for educational purpose investors are advised to get in touch with their financial advisor before taking any trade based.
#GLOBALEDUCATION
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