On the fundamental side a lot of negative news is built up in case of Opto circuits.
The company was forced to withdraw its GDR after keeping it open for 2 and half months.
The credit rating of the company was down graded to default grade.
There is no news on the receipt of insurance money for the damage caused by the Vizag cyclone.
Management just does not communicate anything with the investors.
And in this choppy market conditions, it is natural to expect a high debt company like opto to go down quite steeply and that’s what appears to be happening.
But Technically it seems that all this negative news is already priced in. AND if we shift our focus from daily charts to monthly charts, then it becomes apparent that if by the end of Sept 2015 the RSi does not go below the lower / support line, then there is a good chance of a bottom formation in Opto circuits as well as a bullish divergence on monthly charts. This is a very strong reversal signal.
I have presented to investment strategies for those interested in opto circuit using weekly charts – Aggressive entry and conservative entry. Investors may consider using either of these to make an initial entry in Opto Circuits.
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