Medium term view – NETWORK 18 – IDBI Capital
We had recommended this counter as a buy in our May 2010 letter at 158 levels and on dips towards 140-30 for target 290 / 342 / 386. Looking at the chart we find that prices after several failed attempts to breakout from a primary accumulation pattern at 165-70 levels (orange line), 
collapsed sharply during the first week of July 10, dropping from 170 levels to 130 in just two weeks. Around this low our dips call came into effect. There was also the support of 38.2% retracement of the rising leg Nov 09 – July 10.
Prices after a small pullback once again slipped into some corrective action in the following week. RSI having hit resistance at 40 had turned around slightly, indicating presence of bearish overhang here. But with last weeks renewed attempts to rally, both price and momentum have seen better movement. Like we can see on the chart. RSI managed to breakout above 40 and Stochastic has just above given a fresh buy trigger. We need to see some more follow thru for a confirmed pullback signal There are multiple supports around 125-27. A break of this should be considered seriously. Maintain a stop below 105.
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Category: Medium Term
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