Indicator Free Analysis using Simple Price Action - A Case Study

tksthathachari Updated   
This is the monthly chart of BATA India. In this we can see that there was a bull run from December 2016 to March 2020. It came down slowly to form a falling wedge pattern and also a double bottom pattern from Mar 2020 to June 2021. It gave a good breakout of the falling wedge or flag pattern in July 2021 and the momentum continued.

Here we have not used any indicators and are simply following price action. According to the price action, a big resistance is at 1800 levels where the stock may halt before giving breakout.

How to trade the stock?
1. After getting a confirmation that the stock has broken out of a bullish flag pattern, we could have taken a trade at 1600 levels with a SL of 1200 and a target of 2200-2400
2. At present too, we can buy the stock between the levels of 1700-1800 with the same SL of 1200 and a target of 2400.

How was the target calculated?
The total distance covered by from the highest point of the flag ( approx rs 1800) to the lowest point of the flag (approx Rs 1200) should be calculated i.e. Rs 600. Now on giving breakout, the stock should ideally move Rs 600 from the highest point of the flag (Rs 1800). Thus the long term target comes out to be Rs 2400. However it is just a prediction. So one should give or take a standard +/- 5% deviation from the predicted target.

PS - This stock has been chosen for only an ideal case study. This is not a recommendation. The stock may or may not perform as predicted or described.
Trade active:
Stock closed an all time high of 1944..2400 target comng soon
Stocks is now beyond 2100..Cheers to those who traded the stock..


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