himanagendra

Idea formed a Bearish Pennant pattern on weekly & daily

Short
NSE:IDEA   VODAFONE IDEA LTD
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Idea formed a Bearish Pennant pattern both on Weekly & Daily charts . ( google it)
A bearish pennant is formed during a steep, almost vertical, downtrend.
After that sharp drop in price, some sellers close their positions while other sellers decide to join the trend, making the price consolidate for a bit.
As soon as enough sellers jump in, the price breaks below the bottom of the pennant and continues to move down.
To trade this chart pattern, we’d put a short order at the bottom of the pennant (yellow line)with a stop loss ( Rs .9.25)above the pennant .

That way, we’d be out of the trade right away in case the breakdown was a fake out.

Unlike the other chart patterns wherein the size of the next move is approximately the height of the formation, pennants signal much stronger moves. If weekly is considered, we can see the fall until Rs .4 & on Daily until Rs .6.95

I suggest not to take any positions until the fall is over.
Also, yesterdays breakout is due to Muhurat Trading and people invested in it because it is a penny stock.
However, it fell without crossing 9.25.
Also, to break the trend line , volumes are required in any situation but here sufficient volumes are not available.
After considering everything, i'm suggesting on not entering into idea now. Enter at 6.95 and if the fall continued, add on dips.
Comment: Idea failed