GMM Pfaudler is beloved stocks for many. The stock has given outstanding returns over last 2-3 years. The recent rally made me look into its long-term charts and correlate with volume, delivery %, and 50/200 MAs to see if GMM Pfaudler exhibited any monster stock characteristic early on that could have helped investors own the stock.
This post, in no manner, intended to put stock in negative or positive bias. It is pure analysis of its past 14 years behavior. The chart is taken directly from screener and hence I’d believe that readings are fairly accurate, if not perfectly accurate.
I have also covered something called as Climax Run and what are associated characteristics that investors can easily monitor to ensure they keep maximum gains from the rally.
Observations: The phases mentioned below are highlighted in the image with square color boxes to help see chart.
Please note: The numbers are approximate and not point perfect.
- Average vol from 2006 to 2008 is less than 100k
- Average delivery is approx 89%
- Average vol from 2008 to 2010 is less than 10k
- Average delivery is approx 73%+
- Average vol from 2010 t0 2014 is less than 10k
- Average delivery is approx 80%+
- Average vol from 2014 to 2018 is suddenly up from previous phases and about 50k+
- Average delivery from 2014 to 2018 is still 75%+
This is where things get extremely interesting
- Average vol from 2018 to 2020 is suddenly dropped dead and is less than 6k!!!
Now, again, things get interesting
- From the price of 2900 onward, volume is again up from less than 6k to 25k – That is 4x time rise
- Average delivery is now down below 50% and from price of 2900 onward, average delivery is less than 40%
Correlation with Monster Stock Characteristics:
From early on, stock moved along 50 MA and followed it consistently from the price of 100 to 2400.
The volume was decent + delivery was also excellent as below:
- 89% delivery between 2006 to 2008
- 73% delivery between 2008 to 2010
- 80% delivery between 2010 to 2014
- 75% delivery between 2014 to 2018
The volume dropped suddenly from 2018 to 2020 and stock went from 700 odd to 2900 on no volume, clear sign of run up on low volume. This is an altering sign.
But, from 2900 onward, volume is back again – almost 4x volume compared to what it was form 2018 to 2020.
Delivery now is below 40% from 2900 to 4200.
It seems that from the price of 2500 onward, stock is in climax run, leaving 50 MA way below and even 200 MA way below at 2300. Nobody can really confirm when such climax run will be over. However, it is a sign that you need to monitor the stock closely.
GMM exhibited every sign of monster stock from the start. It has been a monster stock. However, it is now showing signs of climax run and it is very clear the way volume, delivery and price are interacting with one another.
It is extremely important that when you own a monster stock you pocket gains and learn to part ways to ensure you do not give back the gains.
This post is not to show stock in any negative or positive view. It is pure unbiased view to ensure investors keep all the gains they made from the rally.
This post is just about observation of the stock price and its correlation with volume, delivery %, and 50/200 MAs.
It is rather easy or matter of luck to stumble across a monster stock. It is even better to ride the meatier part of the rally and make exponential gains. However, keeping the gains is the most difficult part of the game. Investors are not willing to part ways with their beloved stocks and it is natural.
If you are one who is holding GMM from lower levels, I urge you to please monitor how it behaves at 50 MA, which is at 3277.
Investors must be extremely careful unless stock spends sometime consolidating and allows the 50 MA to catch up with price. If stock keeps on moving without forming consolidation after rally and allow MAs to catch up, then last stop for you is around 3277. This could change in coming days.
The day you notice stock falling below 50 MA with volume, it is a final sign for you to keep whatever gains that remain.
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