Hey.. What do we get if we analyse one chart with two different theories ? Is it a good idea ?
We use different techniques and methods to analyse a chart. Some traders use chart patterns, some use moving averages and others use any other technique. We all did the analysis to determine the trend of that instrument.
What if we use two different theories for the analysis ? It will give us a more accurate view for that instrument.
Lets check the analysis Nifty Pharma Index Daily Chart by 2 different theories of Chart Patterns and Exponential Moving Averages.
Chart Pattern
A symmetrical triangle pattern appears on the chart. And today we see the Breakdown of the pattern. The breakdown of the pattern shows the weakness of the index.
Exponential Moving Averages
For this we use four exponential moving averages of 20, 50, 100 and 200 periods. We start from the 20th of Jun 2022 when the price is below the all exponential moving averages. From that day the price started its upward move and it crosses all ema's one by one and finally it reached at 200ema on 5th of Aug 2022. During the period of 3 months the all 4 ema's come close to each other. But the price has failed to cross the 200 ema and it starts its downward move. From 22nd of Aug 2022 the price tested its 20 ema and 50 ema but has failed to hold them. Finally on the 16th of Sep 2022 the price closed with a big red candle. The price traded below to all 4 ema's shows the weakness and start of a downtrend.
Conclusion: From both theories we see the weakness in the pharma index. So, the stocks of the sector show the bearish move in the coming days.
This explanation is for educational purposes. My only intention is to share my style and techniques of analysis. Thanks
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