360 analysis of Jayant Agro-Organics Ltd, India ($JAAO.NS, $JAYAGROGN).

This topic shows why you need to book profit in a stock that went up sharply and keep holding it when it falls. I also explain here how you might look for a new entry in the stock at the current depressed price level using simple support and resistance concepts.

A) The stock is undervalued at the current price level.

B) However, the industry (Specialty Chemicals) is not one of the strongest. The industry is decelerating.

1) In the weekly chart, after it broke out of the Watermark resistance at INR 75 in May of 2016, it did not look back. Kept on going up.

2) It hit the peak of INR 570 in April of 2017. That was a 660% profit from the breakout point if you caught it at the breakout time.

Incidentally, a bearish Headwind possible reversal signal appeared right at the very top of the price.

3) Today the stock closed at INR 160, just below the Memory trendline resistance in the weekly chart.

What to expect now? How to be prepared for the next trade?

The stock has declined a lot from the Apr 2017 peak and is undervalued. It may be better to avoid shorting it now. Instead, you might look for a buy setup.

4) If the stock breaks out of the Memory resistance, you may look for a low-risk entry opportunity.

5) You might also see if the stock drops to the Memory support and reverses from there. Such a reversal is sure to give a low-risk buying opportunity.

Whichever entry opportunity comes, you will be better off if you buy it when the industry is also starting to strengthen, unlike the current situation where the industry is decelerating.

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