BEML LTD on the NSE with daily candles
Chart Pattern Analysis
1. Rising Wedge Pattern:
- The chart shows a rising wedge pattern. This is formed by two converging trendlines where the slope of the lower trendline is steeper than the upper one.
- Rising wedges can indicate a potential reversal pattern, often considered bearish, especially if it appears after an upward trend, as it might suggest a loss of momentum.
2. Support and Resistance Levels:
- Resistance: The upper trendline of the wedge acts as a resistance.
- Support: The lower trendline of the wedge acts as support.
3. Volume:
- There seems to be an increase in volume when the price touches the trendlines, which is typical in patterns like wedges where traders are active at the boundaries.
4. RSI (Relative Strength Index):
- The RSI is shown at the bottom, providing insight into overbought or oversold conditions.
- It appears to be around the middle of the range, which might not indicate any immediate overbought or oversold conditions.
Trend Analysis
- Current Trend: The trend within the wedge is upwards, but as mentioned, a rising wedge can indicate a potential reversal to the downside.
- Breakout:
- Bearish Breakout: If the price breaks below the lower trendline of the wedge, it could signal a bearish reversal.
- Bullish Breakout: A break above the upper trendline might indicate continued upward momentum, although this is less common in a rising wedge pattern.
Target Estimation
1. Bearish Target:
- If the price breaks downward, a common target is the base of the wedge pattern. This could mean a move toward the 4,066 INR support level.
2. Bullish Target:
- In case of a bullish breakout, the target can be calculated by measuring the widest part of the wedge and projecting it upwards from the breakout point.
- Based on the image, a potential bullish target could be around 5,438.75 INR.
Recommendations
- Confirmation: Wait for confirmation of a breakout. A daily candle closing below or above the wedge with significant volume can be a signal.
- Stop-Loss: Place a stop-loss just outside the opposite side of the breakout for risk management.
- Volume Check: Ensure that there is accompanying volume to validate the breakout direction.
Conclusion
- Pattern: Rising wedge (typically bearish).
- Strategy: Wait for a confirmed breakout.
- Targets:
- Bearish: Around 4,066.60 INR.
- Bullish: Up to 5,438.75 INR if it breaks.
1. Rising Wedge Pattern:
- The chart shows a rising wedge pattern. This is formed by two converging trendlines where the slope of the lower trendline is steeper than the upper one.
- Rising wedges can indicate a potential reversal pattern, often considered bearish, especially if it appears after an upward trend, as it might suggest a loss of momentum.
2. Support and Resistance Levels:
- Resistance: The upper trendline of the wedge acts as a resistance.
- Support: The lower trendline of the wedge acts as support.
3. Volume:
- There seems to be an increase in volume when the price touches the trendlines, which is typical in patterns like wedges where traders are active at the boundaries.
4. RSI (Relative Strength Index):
- The RSI is shown at the bottom, providing insight into overbought or oversold conditions.
- It appears to be around the middle of the range, which might not indicate any immediate overbought or oversold conditions.
Trend Analysis
- Current Trend: The trend within the wedge is upwards, but as mentioned, a rising wedge can indicate a potential reversal to the downside.
- Breakout:
- Bearish Breakout: If the price breaks below the lower trendline of the wedge, it could signal a bearish reversal.
- Bullish Breakout: A break above the upper trendline might indicate continued upward momentum, although this is less common in a rising wedge pattern.
Target Estimation
1. Bearish Target:
- If the price breaks downward, a common target is the base of the wedge pattern. This could mean a move toward the 4,066 INR support level.
2. Bullish Target:
- In case of a bullish breakout, the target can be calculated by measuring the widest part of the wedge and projecting it upwards from the breakout point.
- Based on the image, a potential bullish target could be around 5,438.75 INR.
Recommendations
- Confirmation: Wait for confirmation of a breakout. A daily candle closing below or above the wedge with significant volume can be a signal.
- Stop-Loss: Place a stop-loss just outside the opposite side of the breakout for risk management.
- Volume Check: Ensure that there is accompanying volume to validate the breakout direction.
Conclusion
- Pattern: Rising wedge (typically bearish).
- Strategy: Wait for a confirmed breakout.
- Targets:
- Bearish: Around 4,066.60 INR.
- Bullish: Up to 5,438.75 INR if it breaks.
Disclaimer
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