Libas - Potential Bullish Divergence in Descending Triangle

Jul 21

Libas Designs Ltd. is currently trading within a descending triangle pattern. A potential bullish divergence between the price action and the RSI could indicate an upcoming trend reversal.

Technical Analysis:

• Descending Triangle Pattern: The stock has been consolidating within a descending triangle pattern, characterized by lower highs and a strong support level around ₹16.5.
  
• Lower Low in Price: The price recently made a lower low, near the support level of the triangle.
  
• Higher Low in RSI: Simultaneously, the RSI (14) made a higher low, creating a bullish divergence. This suggests that the selling pressure is weakening, despite the price making a new low.
  
• Volume Analysis: Volume has been decreasing during the formation of the triangle, which is typical for this pattern and indicates a potential buildup before a breakout.
  

Trade Setup:

• Entry Point: I would wait for a breakout and retest above the top trendline. Probably somewhere above the 17.5 mark.
  
• Stop Loss: A stop loss below ₹16.00, just under the recent support level, to manage risk effectively.
  

Disclaimer: This analysis is for educational purposes and should not be considered financial advice.

Jul 22

Comment

Price closed above the trendline today.

Jul 25

Comment

Looks like the Re-test is complete. Let's see over the coming days.

Disclosure: Invested

Sep 7

Comment

>20% up as of now.