Is the Pressure Cooker loosing steam

In 2010 / 2011, one sector outperformed every other sector in the Indian markets. While Pressure Cookers aren’t seen as a sector, all stocks in that sector saw a tremendous rally, a rally that is better displayed in the relative comparison chart below.

 

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As can be seen from the above chart, while Nifty has returned a minuscule return of 16.57% since 2010,  TTK Prestige which was the first to take off has given a return of 628%, Hawkins (BSE Code: 508486) returned 423.50% and Butterfly Gandhimathi Appliances (BSE Code: 517421) a return of 185%. 

But when one looks at the Year by Year returns, the momentum seems to be slipping. Here is a table of returns lodged by the stocks since 2009,

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For the first time in 6 years though, all three stocks are into negative territory. Lets look at the Individual charts to see whether we can find any opportunities at the current stage.

Butterfly Gandhimathi Appliances

Of the three stocks, this has given the least amount of returns . Due to the long period of range based trading, the daily chart of the stock shows not much of a signal. The stock is trading just below the 200 day EMA and MA but based on the number of times we have crisscrossed those levels, it makes little sense to read too much into it.

The weekly chart (chart below) though provides us with a much better reference points. 240 seems to be the long term support while 400 sees to the resistance level to be crossed.

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TTK Prestige

On the weekly charts, TTK Prestige shows a clear ascending triangle pattern. Right now though, we seem to be approaching the lower trend line (violation of which would make the entire pattern invalid). Major support below that level would suggest a move to the support levels indicated on the chart below.

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Hawkins Cookers Ltd

Compared to the previous two stocks, Hawkins has shown way greater volatility on both the rise and the fall. While I have drawn a channel on the weekly charts, the weight we can give to the pattern is low due to the number of touching points being just two in number.

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To conclude, while all stocks seem to have started to weaken on the short term, on the long term, the current fall is nothing more than a pause in the long term rally (if at all this evolves into one). If the lower trend line is not broken, TTK appears to the best bet as of now though Hawkins with its Higher High Higher Low formation also is a pretty good bet as long as it doesn’t break below 1630 

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About Prashanth

Have been a full time participant in the stock markets since 1996. Run a Yahoo Group where focus is exclusively on discussions of the Indian Markets using Technical Analysis as the tool (groups.yahoo.com/group/technical-investor)
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