BHEL - Double Bottom chart pattern activated

2 days agoIt sounds like BHEL is showing some promising technical signals. Here’s a detailed look at the patterns you’ve mentioned:

Breakout of W Pattern: The W pattern (or double bottom) is a classic technical chart pattern that often signals a reversal from a downtrend to an uptrend. A breakout above the peak of the W pattern (268 in this case) is considered a bullish signal, suggesting potential for further gains.

Swing Low of 267: The fact that the price made a swing low at 267 right before the breakout could indicate that this level is a support zone. This swing low might also suggest that the price tested this level and found buying interest, reinforcing the strength of the breakout.

Breakout of Inside Bar Pattern: An inside bar pattern occurs when a bar's high and low are within the range of the previous bar. A breakout of this pattern can signal the beginning of a new trend. In your case, the breakout above the inside bar pattern on the hourly timeframe adds additional confirmation to the bullish setup.

Low Risk and High Reward Trade: Combining these signals—breakout of the W pattern, confirmation from the swing low, and the inside bar breakout—can indeed offer a favorable risk-to-reward ratio. The swing low (267) can serve as a logical stop-loss level, while the potential upside from the breakout can offer a high reward.

Overall, the combination of these technical patterns provides a strong case for a bullish outlook on BHEL with a potentially favorable risk-reward setup. As always, consider additional factors like market conditions and news events that could impact the stock's performance.

Regards

Arvind Yadav, Cfa
Arvind Share Academy