Fooled by a Leading Stock

Don't get fooled by a leading stock.

Moreover,

Don't get fooled by a leading stock, from a leading industry group.

Pay close attention

A superficial understanding of charts will never make you money.

You have to go granular.

This is a daily timeframe chart of Bharti Airtel.

For days and weeks, this stock started showing up in my daily filtered list.

I never bothered going even close to the stock.

3 reasons:

1) Falling window of 26 Nov 2025

Any technical positional trader worth his salt must understand the concept of a falling window.

In western technical analysis, they call it a gap.

Whatever you call it, it has a tendency to become resistance.

A falling window inside a base is not a good sign.

Although the window was broken, the price action inside the base did not follow through at all.

Weakness was clearly evident.

2) Trade-able base in a weak market

This is base 3e.

It has taken 5 attempts to complete base 3.

Base 3 itself is not an investable base.

It is a trade-able base.

Meaning,

20 to 25% and not more, is a decent return expectation from that base.

If this base was in a healthy market, I would have at least given it some consideration.

But in a weak market,

I am not interested.

I am better off, trying to find early stage bases with strong fundamentals.

3) Falling Relative Strength Line

Look at the blue line slope.

I have marked it with a red arrow.

Sloping down.

That's weakness.

The stock has underperformed the Nifty Index inside this base.

All positional traders know, this is not a good sign

Moreover, on 29 Dec 2025, the stock broke the 50 Day SMA on a close.

That's what I call a final nail in the coffin.

Nothing great happens below the 50 SMA.

In fact, a wise trader once said,

Nothing great happens below the 21 EMA.

The reason why I keep posting about "How to reject stocks" is:

Once you know what are the red flags to look for,

you will automatically stay away from danger.

Eventually you will land on a stock, in which it is difficult to find a red flag or a problem.

That is a stock worth investigating.

That is a stock worth your time, money, attention, ideas and energy.

Till then,

Beware of leading stocks from leading industry groups.

It could be a trap.

Regards,

Rohit Musale, CFA

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