Symmetrical Triangle Breakout: Weekly Timeframe: 26-Aug-24

Oct 5, 2024

Symmetrical Triangle Breakout: Weekly Timeframe: 26-Aug-24

• Stock forming a symmetrical triangle pattern and can break-out in either direction. Will wait for a bullish breakout above the trendline on a weekly basis before entering
  
• In the week of 26-Aug-24 stock brokeout with a bullish candle. Will enter the trade in the coming week
  
• Volume during the week of the breakout was above 9 SMA
  
• RSI in the week of 26-Aug-24 (64.87) is above 60 - indicating buying interest
  
• Drawdown = 859.8/-
  
• SuperTrend = 1500.52 (26-Aug-24) is positive
  
• ATR = 80.93 (26-Aug-24)
  
• Entry = Idealy at the close of previous week i.e. 1783.05 or at market level
  
• Target = Breakout level + Drawdown during consolidation phase = 1932.5 + 859.8 ~ 2790
  
• Stop Loss = 1 ATR below previous week's (26-Aug-24) low = 1638.75 - 87.74 ~ 1550
  
• Risk:Reward = 3.29
  

Oct 5, 2024

Trade active

Bought on 03-Sep-24 @ 1839.25

Oct 5, 2024

Note

+ Stock comfortably broke the high (1932.5) it made in 18-Oct-21 and closed above in the week starting 23-Sep-24. A multi-year breakout on a weekly time frame
+ Over the same window company's PE ratio has decreased from 72.69 on (18-Oct-21) to 36.03 on (04-Oct-24) indicating a more attractive valuation given the company's earnings
- Breakout in 23-Sep-24 did NOT happen with above average trade volume (9 SMA) [NEGATIVE]
+ RSI in the week of 23-Sep-24 (75.68) is above 60.

* Drawdown = 859.8/-
* SuperTrend = 1687.37 (23-Sep-24) is positive
* ATR = 87.74 (23-Sep-24)

* Ideally should have entered the stock on 30-Sep-24 but missed it
* Stock has retested its breakout levels in the week of 30-Sep-24 but with volumes below 9 SMA and hence will invest again
* RSI in the week of 30-Sep-24 (62.92) continues to be above 60 - indicating continued buying interest
* However since the 30-Sep-24 weekly candle is nearly forming a bearish engulfing candle, will wait for a confirmation bullish candle in the week of 07-Oct-24 and plan to enter the stock on 14-Oct
* Entry = Close of week of 07-Oct, if it is a bullish candle
* Target = Breakout level + Drawdown during consolidation phase = 1932.5 + 859.8 ~ 2790
* Stop Loss = 1 ATR below previous week's (23-Sep-24) low = 1896.05 - 87.74 ~ 1800

Oct 12, 2024

Note

Week of 14-Oct

• The previous week also closed with a red candle.
  
• For the last 2 weeks the weekly candles have been making lower lows
  
• The stock has now retested its multi-year breakout level and is trading below it.
  
• Will wait for a bullish weekly candle to pyramid further.
  
• Trade setup: Plan to initiate trade in the current week if the price makes a new high. Previous high was made in the week of 23-Sep'24 i.e. 2029.9. Will trigger a buy above 2030. Hopefully that would also result in a bullish weekly candle closure.