15 Sep 2020 ● 12:19 PM
Today I have to write about Bharti maybe for the last time who knows. The stock has always been an erratic one for trading so I only write about the long term picture. For the first time this year it attempted to breakout to an all time high after a decade. That has everyone's attention. I would not have written about it but for public demand. And is it happens once the weekly band of 510-480 broke there are comments everyday asking for an update. An email a phone call, it appears the whole world owns Bharti. It starts feeling like yes bank where I stopped writing once there were too many questions. A good decision. In this particular case, that one note now has gotton me the first 1 star rating on the App store, quoting Bharti for his rating. Historically the Telecome sector in India has always been a troubled one, that is not new. Go back to 1990s reforms era and there are manay telecom bankruptcies along the way. Some just because of changing govt policy in the early days. Later due to the capital intensive nature of the industry and the pricing war. Bharti was then a survivor. Even BPL India's first movile operator has disappeared.
So I never touch this counter for trading or investment but for the mass interested here is one final support. We are at 61.8% of the last rally at 468, marked for a third time as wave 1 and 2 in the series. It held the level today so watch it. Below that the trendline of the last two lows is at 458. Now if these levels break I will not be here with one more write up. What happens next? figure it out. Not the cleanest wave counts on a daily chart so do not question the markings
If these two supports hold there is a last hope that the recent change in the performance cycle was meaningful. The chart below is the Relative strength chart of Bharti with the Nifty. This is basically a ratio chart of the two. The declining trend shows a long period of under performance. The recent rally attempted to break that trend. Hopefully it was not a false breakout. If Bharti is a defensive stock like Infosys was from 2000-2020, then it will not beat the index even if it goes up. So watching the relative performance chart is important. What better reason to own a stock directly except its ability to beat the index at least. That is an important call to have for long term investors. So even if the move to an ATH [all time high] signals an up trend, out performance makes the trend relevant to investors.