ITC is one stock that is exhibiting 4 strong buy signals:
1. Price Action - The stock has been trading in a price action value area as indicated in the box. Can zoom out to get a better view. See the linked ITC idea on how to exploit it best. 2. Regular Bullish Divergence - There is a clear bullish divergence as indicated on chart. 3. Declining volumes also confirm the divergence. 4. Pullback from 50 DMA - The stock has taken continuous support from the 50 DMA since its uptrend in May and unless its breaking that trend due to a significant correction in the Market over the next week, the pullback offers a good entry point.
So I would be going long on CMP with a SL at 192. Risk averse may want to take positions above 195 (50 DMA).
Immediate targets would be 196.5, 198, 200, 202. If it sustains above 202 on the hourly chart - there is a gap to fill opening targets 207, 210.
P.S. I see a lot of traders here posting statutory warnings about how they aren't responsible if the reader loses money by following the idea blindly. Same Pinch!
Comment
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If it breaks with conviction below 192, will initiate short positions
isnt Increase in Momentum while the price is going down a bearish continuation signal?
I am long for the last one week @ 195 , two days in a row, ITC hit a high at 198 and reversed and On Friday it hit an Intraday high of 197 and reversed.
raj_rishav
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@kurian_eq, you are right but overall price trend is in an uptrend as can be seen on the all MAs and its currently near the price action support. So, I am reading it as a trend reversal divergence. Won't take short positions unless breaks 192 convincingly. This is a high Beta stock, your observations are inline with NIFTY & NIFTY FMCG. Please refer my linked ITC idea of last week on how I have traded the ranged price action.
Sandeepk31
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Use the trend lines on weekly chart and it's trading in an channel this week support is at 188.20 and resistance at 216-218....so if it keep trading in this channel by end of this year. Then target will be 256...any close above or below this channel is opportunity for big short or long...
Vaishali420
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but what if nifty drops down ?
my view was same but it is looking weak because of nifty is not moving upward..
raj_rishav
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@rudra420, as added in comment, I won't take short positions unless it gives a decisive break below 192 with a close below on the hourly chart. It may turn out to be a bad bear trap
singhramandeep7186n
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bro.. the divergence is not plotted right...
raj_rishav
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@singhramandeep7186n, Price making LH while Momentum making HH drawn with Orange trend line.
I am long for the last one week @ 195 , two days in a row, ITC hit a high at 198 and reversed and On Friday it hit an Intraday high of 197 and reversed.