The previous analysis of the stock chart pattern of Bartronics India was mainly to warn my readers about the deteriorating fundamentals of the company, so that those still invested in the stock could get out before it became too late.
Every bull run in the stock market throws up a few ‘favourites’ which are strongly backed by broker and analyst recommendations. These tend to attract small investors with little or no prior experience of stock selection. They get enamoured by the ‘theme’ and invest in droves without doing due diligence about the company, its promoter’s track record, and the business fundamentals.
The more esoteric and ‘high tech’ sounding the theme, the more attractive the stock appears. Some of these ‘theme’ stocks of the previous bull run have taken many small investors to the cleaners. Cranes Software (engineering software), Suzlon Energy (wind power), Praj Industries (alternative fuel), and Bartronics (bar code readers and smart cards) are a few examples.
The Bartronics stock was hovering near its 200 day EMA around the 150 mark when I wrote the previous post back in Mar ‘10. Those who heeded my advice and sold out have saved themselves a lot of money. The one year bar chart pattern of Bartronics shows that the stock has lost 50% of its value:
The stock desperately tried to cling on to its long-term moving average – some times dropping below, then recovering above – till it convincingly broke down in Aug ‘10 and quickly dropped to 100, which happened to be a long-term support level.
A high-volume bounce in Sep ‘10 raised bullish hopes, and took the stock above its falling 20 day EMA. The respite was brief. The stock started sliding down towards the 100 level with the 20 day EMA acting as a strong resistance.
Another bounce from the 100 level on decent volumes in Nov ‘10 saw the stock briefly clear both the 20 day and 50 day EMAs. With all four EMAs falling in unison, bears used the upward bounces as opportunities to sell.
Once the stock fell convincingly below 100, bears took control and the stock slid sharply down to a low of 72 on Dec 20 ‘10, losing more than 50% in 9 months. The technical indicators are all bearish. The MACD and ROC are negative. The RSI and slow stochastic are in their oversold zones.
If you are one of the unfortunate few who are still holding on with hope and a prayer, I’m afraid I can’t provide any solace. There is not much hope of any improvement, and prayers don’t work too well when a stock is fundamentally and technically weak.
Bottomline? The stock chart pattern of Bartronics – as well as the other stocks mentioned – are in strong bear markets. Just goes to show that a bull market does not necessarily drive up prices of all stocks. Small investors should do their homework before investing in popular ‘themes’. Better still, avoid well-publicised ‘theme’ stocks completely.