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Friday, December 14, 2012

Bottom Formation in Education Stocks - Educomp, Everonn and Edserv!

Education stocks have received tremendous beating after being toast of investors in previous Bull runs. Sample this, Educomp is languishing at Rs 150 odd, after reaching a high of Rs 1020 in late 2009. Since late 2009, the stock has only seen one side, which is downside. Now the scrip has lost 85% of its valuation since its highs, the charts of three of these Education scrips are giving signs of bottoming down.

Lets look at charts and figure out. Pls look at Educomp chart below:



Currently Educomp is trading in a thin range of 125 - 175. If you notice, the volumes have been very high and aggressive in this bottom formation. This may mean panic selling by retail near the lows and accumulation by stronger hands at value price.

Now after six months of accumulation in this narrow band, Educomp the strongest of the Education sector scrip, can break out and test the next resistance at 290 odd levels. Next set of resistance at 380 and 490 respectively.


Everonn has also seen highs of 1235 in its heydays of early 2008, and is almost touching its Oct, 2008 bottom of Rs 125 now. So about 90% loss of value for this Education sector stock as well.



The charts are showing bottoming out phenomena, and from last months lingering in a zone of Rs 135-175. Its unlikely that downside of Rs 135 will be broken, so stock may linger here for some more time and then decide to breakout. The next set of resistance will be at 180, 220 and 325 respectively.

Edserv, is the odd man out and has broken its 2008 lows of 18 already. The scrip is again seeing heavy volumes and is traveling in a range of 12-22 from past few months. \


This might take a few more months to bottom out and is currently trading at 95% discount to its peak price of Rs 300 reached in early 2010.

Thanks for reading this post and keep writing in to us.   

3 comments:

  1. Hello

    I have been going through your posts and I appreciate sharing of your knowledge with rest of us. There are lot of sites available which provides recommendations when everything is good but you are doing a great work to analyze the failed stocks for helping the people stuck with those scripts.

    I am one of the persons stuck with Educomp and my avg price is still around 500. After going through your analysis I thought of averaging it but on BSE website I found that promoters are reducing their stake in the company. Also most of the communities are warning against this company.

    Could you please share your opinion regarding promoters reducing their stake?

    Regards
    Uday

    ReplyDelete
  2. Hi Uday,

    Responded here:
    http://www.stockfundoo.com/2013/01/your-questions-on-l-educomp-phillips.html

    Regards
    Naren

    ReplyDelete
  3. Hi. I am Bijaylaxmi Sarma. I need your help. Actually I have bought 195 share of 3infotech at Rs. 18/-, Now the current price of this share is Rs. 6.60/-. What do I do with this share. Should I hold it? Please advice/suggest me.

    ReplyDelete

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