Stocks priced under Rs 100 with a bullish pattern by candlestick strength

When Japanese rice trader Munehisa Honma was making tons of money in Osaka in 18th century he wouldn’t have imagined that nearly three centuries later, the method devised or at least attributed to him—candlestick charts or Japanese candlestick charts—would become the staple of studying patterns in the stock and currency market.

Investors who bank on technical analysis or patterns in the price and volume movements of a stock(s) typically use candlestick charts or use it along with other parameters to predict price movements of stocks in the future.

In simple terms, the candlestick captures the opening and closing price along with highs and lows of a stock. Analysts study patterns of these candlesticks to pick stocks.

One of the strategies that are used by technical analysts is to look at stock with good aggregate candlestick strength. This in turn is the value one derives from the net of bullish over bearish candlestick indicators.

If the number is in the positive quadrant and has a higher value it indicates the bullish pattern and vice versa for the number being in the negative side.

If we apply this to the broader list of stocks, we get a set of around 130 companies that have a good aggregate candlestick strength of 1 or more, showing bullish trends. Most of these stocks are from the small and micro-cap list.

If we filter out companies by focusing on stocks with stock price under Rs 100 each, we get around a hundred companies.

In this set, some of the companies include National Plywood, MITCON Consultancy, Goldstone Technologies, Raj Television Network, Creative Eye, Lexus Granito, Axel Polymers, Crown Lifters, Olympia Industries, Oceanic Foods, RLF, Caprolactam Chem, RMC Switchgears, Stellar Capital, SKIL Infrastructure, VirtualSoft Systems, ASL Industries, Cadsys (India) and Flexituff Ventures.

A few other stocks in the pack include Envair Electrodyne, Cindrella Financial, Silver Oak Comm, Sri Vajra Granites, Cranex, Roselabs Finance, Milton Industries, Ashima, Keynote Financial, Shree Rama Multi-Tec, Tantia Constructions, Sanco Industries, Marg Techno Projects, 7NR Retail, Gemstone Investments and K-Lifestyle.