The counter was under observation since last few months as it tried to start uptrend by moving significantly in the upward direction and failed. I was observing the counter with a great amount of curiosity that something positive will definitely occur in near future. This was going on since last 2-3 months.
At last, I found something on the charts. A Gap down . What is so significant about it?
Following are the arguments in the support.
1. A gap down at the bottom of any trend or move creates possibility of making a pattern on the charts.
2. The low of the day - 173.35 was almost similar of the previous low of 172.3 of current down trend generated on 24th November 2016. Means the price was on the .
3. Third positive point was that the closed price was just above the daily S1 of 173.4.
The matter is of next day's stock movement. It was a bit disappointing for almost major part of the morning session on 16th February 2017. The stock opens gap up with the difference of 10 paise and went down to hit the low of 171.6. The heart breaking move of the stock in unexpected direction. Suddenly the table turned with the counter hitting low of 171.6 and immediately it started moving upward and breaks the open of the day. But again it went in consolidation and stay around 173 till 14:30.
The last hour of trading was very decisive. The counter started showing some movement and crossed the level of 174 in intraday. We immediately smell the situation and enter the counter for intraday trading. The stock hit the intraday high of 179.7 before 15:00 same day and the closed at 178.9 after some fluctuations. The pattern of was formed on the and a positional buy call was generated. But it was too early to take a decision.
We watched the counter for few more days. At last the day of ultimate breakout arrived on the 23rd February 2017 when the stock registered a commanding breakout candle on the hitting high of 185.15 and closing at 184.45. The breakout candle was significant because it also broke the resistance line on . The ultimate positional buy call was generated.
I recommend the Buy in Apollo Tyre and follow the counter with dynamic SL for longer periods. Immediate target can be 200 and SL can be 175. The buy call is also supported buy a on monthly charts.
Enjoy Trading...Trend is Friend