Froth in any stock will lead to parabolic moves. These take the form of moves ranging from 50-100% within a few weeks. These kind of rallies are often followed by sharp corrections, or prolonged sideways movements. Sideways movements post parabolic moves are often seen in stocks which hold promise of good future earnings.
But what I have usually seen is that post parabolic moves, most of the upsides are captured, and hence it might make sense to atleast book partial if not full profits. ( there will be exceptions to this too, where post parabolic moves also upsides can materialise)
You can see examples of parabolic moves in stocks like HBL, Som distilleries, Zen tech, etc. One indication with these moves is that the weekly and monthly RSI are well above 80, usually approaching 90, and sometimes cross 90 also. Chances of getting parabolic moves are higher once weekly and monthly RSI cross 70, and trend on the upside. ( this is contrary to conventional wisdom, where very high (above 70) RSI is an indicator of overbought state of affairs) .
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