(Chart Analysis by Kunal Bothra, ETNow)At the outset, a qualifier: I am not a chartist or technical expert. I piece together this editorial only to share my experience of observing charts through the course of my decade-long career.With my limited experience in chart reading, I turned to Kunal Bothra, ET NOW’s in-house technical expert, and we together got down to look at some examples only to find charts indeed can be eye-openers for investors.Over the years, having spoken to many fundamental and technical analysts, who look at company valuations and return ratios and those who understand chart patterns and trends, I have come to believe every stock has a story to tell.I mean every stock. Not company. Do note. Over the past couple of years, I got into the habit of looking at ‘period charts’ or ‘long-term charts’.Whether you believe in fundamentals – i.e. earnings, PE ratios etc – or in price trends, whether you are a long-term investor or short-term trader, a three-year, or better still, a 5-year chart, always gives you a whole new perspective about building an investment case for a stock.History may not repeat itself in the market, but it gives you data points and insights to understand how the market can behave in the future.The following examples would bear out how a period chart can help you decide whether you want to invest in a stock or not. The caveat here is, it is not a 100 per cent foolproof method, but it can certainly be a guideline to make an informed investment decision.Case 1Maruti: The five-year chart of Maruti tells you why the market loves the stock so much. The one major fall the stock witnessed was during the early 2016 global market crash on the back of a big slump in crude oil prices. But guess what? The stock came back with a vengeance to conquer the Rs 10,000 level by the end of 2017, in just 24 months. From its 2016 low of Rs 3,000, the stock has gained 230 per cent. A good stock can never stay low for long.Maruti 5-year chart 62469078 Kunal Bothra’s analysis — ‘Buy and hold’ is the most simple yet most difficult-to-follow approach in the stock market.- Maruti’s price charts are on an extremely strong uptrend. That’s the case not just in a five-year period chart, but since its inception. This stock truly epitomises the India Growth Story in its own way.- Every dip, irrespective of news flow, had seen a lot of demand. In last five years as well, there has been just one big correction in the stock, which happened at the end of 2015. However, that correction proved to be “one step back, and three steps forward,” as the stock multiplied three times from those lows in early 2016.Case 2TCS: When I started my career, IT as a sector could do no wrong. It was seen as a bling compounding story. Post the global financial crisis, the US slowdown and the advent of new technology platforms, Indian IT has been struggling since late 2014. One look at the five-year chart of TCS tells you that the upside is not clear. The chart is mirroring fundamentals. The cloudy business environment is influencing technical trends of the stock. Can you expect a turnaround by looking at this chart? Watch closely.TCS’ five-year chart 62469091 Kunal Bothra’s analysis- TCS falls into what I call a ‘3S’ trending model.- Here trends are Stable, Slow and, hence, Sturdy.- In case of a strong uptrend, the stock doesn’t break its previous monthly low, and continues to rise higher.- This invariably acts as a ‘Trailing Stop Loss mechanism’ style of investing.- Using this TSL method, an investor could have managed to ride the trend when the stock rose from Rs 1,000 to Rs 2,700 (blue shaded region).Case 3 IndusInd Bank: When it comes to private banks, HDFC Bank is seen as the leader. The star of 2017 was, however, IndusInd Bank. Analysts draw parallels between the two. Some look at IndusInd as the next HDFC. Is it?When we study the five-year chart, it gives us a better picture on how IndusInd tends to make higher highs and higher lows, always bouncing back. The quarterly financial results of the bank have pleased the market.Indusind Bank’s five-year chart 62469116 Kunal Bothra’s analysis — Price charts of IndusInd Bank depict a ‘Range behaviour’ pattern.- Here, the stock rises to a certain extent and then goes into a prolonged pause. This pause is more of a ‘time correction’ rather than price correction.- It’s a process of ‘Mean Reversion’, wherein extreme price moves are countered by prolonged consolidation, when the stock remains rangebound. In this duration, the prices come back/revert to their long-term key moving averages. It’s basically a pause mode in stock price trends.- In fact, even if we look at the chart, the magnitude of the correction has not been more than 15-20 per cent even in these phases of price/time consolidation.- Timing your entry, or averaging the stock using these consolidation zones effectively, can be a smart strategy even for long-term investors in this stock.Case 4Bajaj Auto: The two-wheeler market has underperformed the four-wheeler market for a couple of years now. But returns that Bajaj Auto has generated despite the trials & tribulations would take you by surprise: the stock price doubled in 5 years. However, the chart is a clear test of patience. Are you that kind of an investor? Take a look and make your call.Bajaj Auto’s 5-year chart 62469124 Kunal Bothra analysis — It’s a curious case of a structured uptrend.- Bajaj Auto remains in a structured multi-year uptrend. However, it’s a very slow-paced uptrend.- Prices are moving in a higher uptrend. However despite volatility in prices, it continues to remain in a ‘Rising Channel’ pattern.- If you look closely, extremes above (point 1) and below (point 2) the trends result into a sharp reaction for bringing the stock back into the channel. This happens due to the fact that the stock by nature is oriented more towards slow trends due to its low-beta nature.- In last five years, the stock has gradually risen from Rs 1,500 to Rs 3,300 in a slow-paced uptrend.Case 5SBI: What can I say about PSU banks? They just do not move! Yes, the government’s recapitalisation plan is a major positive. But when will all the troubled accounts under the NCLT see resolution? When will credit growth come back? When will corporate demand for loans pick up? Too many questions, too much conjecture! SBI’s five-year chart does not surprise at all: investors are not convinced. The positive side: if the upside is capped, the downside is limited, too.SBI’s 5-year chart 62469131 Kunal Bothra’s analysis- SBI’s price charts indicate a ‘Prolonged Patience Testing’ range.- Many a times, the stock goes into a prolonged and frustrating multi-year consolidation. Multi-week or multi-month price ranges can still reward patient investors. But to encash on long-term ranges, one requires patience of the highest degree. In many cases, some bit of smartness in spotting ‘Reversal Zones’ can help make better returns.- In case of a multi-year range, the stock forms a top near the supply zone, and bottom in the demand zone. However, near the top, there would a lot more positive news flow and announcement, which can bring in fresh investors. And once the stock falls in the demand zone, generally there is a lot of negative news flow around the stock, which could lead to capitulation or distress selling.- The only catch here is that after a positive or negative environment surrounding the stock at its extremes, it doesn’t witness any follow-through price move, and hence it gets sucked into a prolonged range till it breaks out.- An astute ‘price trend’ watcher can notice these patterns and position accordingly.Case 6Sun Pharma: Pharma has lost its sheen, just like IT, over the past three years. Sun Pharma is no exception. With USFDA concerns being a key overhang, fundamental analysts are talking of a recovery soon. But with the market at record high, looking at the chart below, do you spot that recovery? If you do, there could be an investment case here. If not, scan through more charts.Sun Pharma 5-year chart 62469138 Kunal Bothra’s analysis- Price is the summation of all market facts. It is the ultimate storyteller of what the expectations of sum total of the market is based on the available information.- Sun Pharma is a case in point. The stock saw a steady rise from 2012 till 2014. But after that peak of 2015, it failed to retest the previous highs. In fact, a closer look at the price patterns indicates that since 2015 (blue shaded territory), the stock has been unable to break the previous swing highs on a monthly basis.- This indicates that even with this simple observation and adherence to this study, one could have avoided being caught on the wrong foot, and not left with a hope trade.Conclusion: -With the understanding of price patterns and behaviour, which forms the basic foundation of technical analysis, one can not only safeguard a portfolio by timing a trade, but also make use of key entry/exit points.Technicians believe investors collectively repeat the behaviour of the ones that preceded them.”Everyone wants the next Maruti.” “If the stock corrects till XYZ level, I will buy again.” – these are few examples of investor sentiment repeating itself.To a technician, emotion may be irrational in the market, but they do exist. And because we humans move in patterns of “Greed and Fear,” such repeated and recognisable patterns would continue to exist in those set of stocks.Sometimes, the answer to the jigsaw puzzle may be very easy, but our minds tend to not believe in simple solutions.As Warren Buffet said:”We don’t have to be smarter than the rest. We have to be more disciplined than the rest.”