INFY
Chart Pattern Identified : BEARISH WOLFE WAVE
In its bearish version , the highs and lows are increasing and herald a downward reversal of an uptrend.
1) A significant maximum is formed, preferably an absolute maximum ( point 1 )
2) The price falls and forms a minimum ( point 2 )
3) The price rises and forms a subsequent maximum higher than point 1 ( point 3 )
4 ) The price falls and forms a subsequent low higher than point 2 ( point 4 ). Trendlines constructed by joining points 1-3 and points 2-4 must converge.
5) Point 5 is the maximum following point 3 and must cross the trendline joining points 1-3. This means that a "false breakout" from the pattern must form.
This point determines the completion of the pattern and the OPENING OF A BEAREST POSITION because according to the pattern, a new wave should form from this point and extend beyond the pattern.
PRICE and TIME TARGET
Following Wolfe's principle, we can set our PRICE TARGET at the point where the trendline extension passing through points 1-4 will intersect the price line . INTERMEDIATE TARGET is also set by placing it at the price level of point 4 , then we can also try to extend the final TARGET.
A valuable indication of the Wolfe pattern is tempo.
In fact, by extending the trendlines of the figure up to their intersection, a time target is identified, i.e. a hypothesis on the period of time necessary for the prices to meet the trendline that identifies the target price (ETA=Estimated Time Arrival ).
If once you get close to the ETA point, the price hasn't reached the target, you should consider exiting the trade.
STOP LOSS
The stop loss should be positioned above the maximum of point 5, perhaps slightly higher.
Trade active:
Sell INFY around 1620 to 1630 for price targets of 1580/1560
Stop Loss 1655
Stop Loss 1655
Comment:
Exit Tomorrow if INFY Closes today above 1655 (Stop Loss).
Trade closed: stop reached:
On 01-03-2022 INFY closed @ 1657. Technically our SL is hit. Though we can see that the stock has corrected from those levels on 02-03-2022. One Should have exited on 02-03-2022 as per our Trading plan.
Comment:
INFY now at 1570 levels as per out Target, but couldnt utilise because it made a high of 1672 and hitting our Targets.