CautiousChartist

GMDC - Very Attractive Valuation

NSE:GMDCLTD   GUJARAT MINERAL DE
CMP- 42.5

Ascending Triangle formation
Above the resistance of 43.5 can touch 46.5
RSI is favorable at 58

Today it gave a breakout of 43.5 with volume but even if it doesn't close above 43.5 today , it may do so in days to come.

Keep a close watch.
Comment: The idea here is to enter at a price at minimal risk and high reward since the RSI suggests that the positivity > negativity.

If the price falls below 39.65 due to a weak Nifty or any other reason then the pattern fails which is exactly where a strict Stop loss is to be maintained.
Comment: Today Nifty showed very good strength especially after breaking above the rising wedge. My Nifty chart is available for reference. So with this positive indication coupled with GMDC also showing strength today, lets expect it to cross 45.5 - 46.5 next week which has been a strong resistance zone.
Comment: Tip: Always keep a stop loss no matter how good the markets are. You can ignore a target but never ignore a stop loss based on your risk appetite because that is the only best friend in the market.
Comment: On the 15minute chart I see a sudden accumulation. Expecting a big move late afternoon or tomorrow.
Comment: The price broke out of the lower side of the triangle. However, keep a close watch and it is advise able to keep a stop loss at 40.9
Comment: Bounce -support - bounce - support. Lets see Mondays bounce back or fall.
Comment: Enter after it closes above 46.5 to be safe but a little risky investors can take it above a close of 43.3 Stop loss 40.9
Trade closed: stop reached
Comment: A revised chart of GMDC has been posted.

Comments

clear me in this one thing,
=> for ascending triangle the entry point point must be from down-side right ? .
+7 Reply
@seriousBoa, What we need to understand is what a pattern (generally proven with high accuracy) is trying to convey rather than how we should draw it. Since different books on charting will suggest different methods you may be right but lets keep it simple. What are we looking for in an ascending triangle?

1) We look for a horizontal line which suggests multiple attempts were made in breaking a resistance formed during swing highs.
2) We look for a rising trend line of higher lows which suggests the momentum is building towards breaking the resistance again.

When both criteria's are met usually the outcome is positive - of course there are exceptions when the market sentiment goes otherwise which is where a stop loss always comes in handy.
+2 Reply
seriousBoa CautiousChartist
@CautiousChartist, so now it's back to the trend line . is it now a good time to buy ?
Reply
@seriousBoa, Enter after it closes above 46.5 to be safe but a little risky investors can take it above a close of 43.3
Reply
NO DOUBT IT IS BULLISH PATTERN....I THINK BEFORE ENTRY LET THE PATTERN COMPLETE..ie ...CONFORMATION....ITS ABOVE 46.5 AS YOU SAY.....DON'T TRADE IN CONSOLIDATION....LOOK FOR BREAKOUT
+2 Reply
@r_milli, Yes, you are right as well for the very safe investors which is why i did mention to take a safe entry only above 46.5. I usually enjoy the thrill of taking entries just before the breakouts because that is where the big moves are. Yes, some trades don't work at times and for that there is a stop loss in place but the win loss ratio is usually approx 70:30
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loved this, neat and clear analysis... But as per me the target would be 55.15 if break 45.55...
marked few resistance , do check buddy...

+2 Reply
@Indyan, Thank You. Means a lot. Absolutely, you are right. Even my 2nd target is around 54.5. The reason I didn't go too ambitious from the very beginning is because of the supply zone near 45-46. However, post that there is no stopping this stock till 54.5 (I took the low of 11 Dec 2019) or all the targets as you mentioned.
Reply
Good.
+2 Reply
CautiousChartist kaarthikeyanki
@kaarthikeyanki, Thank you
+1 Reply
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