WHAT HAPPENED WITH MARUTI? 10000 to 6800 Journey!

Maruti reached its 52W high at 10,000 and has been faaling continuously since then. The way Maruti % fell shocked alot of people, However it was not all that difficult to determine the fall and I will share, how I proceeded and made money in Maruti 5.71% .

On 25 July, Maruti reached its prior top weeks high zone of 9900-10000 again. It was a good resistance and If it is broken with Good volumes, Maruti can go upto 12K-13K, The next day Maruti reversed from the resistance zone and created a Double Top (as shown in the chart), also the Day Candle formed a Bearish Engulfing Pattern which indicates the start of the downfall.

Double Top Pattern is a fairly successful pattern and Share is expected to reach the neckline at 8200-8300 zones before changing its direction.

Maruti immediately the next day formed a large 500 points Bearish Candle which gave me good profits, And I continued waiting for my Initial target of 8200 (Neckline). In the meanwhile share gave a lot of green candles, But I since I was already in profits, I had margin of bear some green Candles.

Each time Maruti showed a couple of green candle, a Big Red candle wiped out gains forming Bearish Engulfing Pattern repetitively, which posted my confidence. Share reached up to 9000 after that Rose 250 points.

I though of squaring off position but the prior experience showed that there has not been 3 consecutive green candles in the past 9 months, So I decided to wait for the next day. Maruti reversed and showed red candles for the next 3 days and formed a 3 Blacks Crows pattern, which is sign of huge fall coming.

Near 14 September One Gap Up for formed, but the next day there was a Gap Down thereby forming a Evening Star Pattern.

On 19 September, Share finally reached my initial target of 8200 after I squared off and decided to play a LONG STRANGLE, to up my possibilities of winning. I took a Put and a Call at 3% Difference.

Soon The share broke the neckline and started to go more downwards, I squared up my call and waited for gains in Put.

Every person has different way of Analyzing. But the idea is to hold onto your faith and continue with your strategy. Even the basic Candlestick patterns have the ability to reap you awesome results.

Thanks, i hope this is Helpful.

Keep sharing the list of shares you want an analysis on. Thanks :)


Nicely explained.
prathamaggarwal RAJAJAYACHANDRAN
@RAJAJAYACHANDRAN, Thanks trader :)
Reply I said the trend is overall bearish, However some relief rally can be seen. Further Maruti is looking a little better and might a little up before retracing.

But since your quantity is huge. So just lighten your position of calls, that will reduce your total investment. So under no circumstance you face loss. Because even a little flat-negative movement can reduce your gains in calls.

On the other side. with light position, you can wait one more week. any upside will give you huge gains even in those remaining lots of CE. And it Maruti falls badly, you already have entire PE lots.

Hope it is helpful.

Reply prathamaggarwal
@prathamaggarwal, Excellent, Thank you.
prathamaggarwal, Rise to bate the buyers. And bomb! If hope you are in major gains, going exactly as per advice :)
very nice description.... u are basically looking at a wyckoff distribution, tally with that concept where the large interests together called composite operators, distributed their shares to the retail and the ownership of the stock changed hands from the strong to the weak, and the trend was literally destroyed...

capsule91 capsule91
@capsule91, the chart was interesting enough to do a case study on the action.. which actually was a base formation earlier.. it seems some groups were accumulating while others doing the opposite... early in the base there were suspicious formations but over all action was positive... everything changed from that bearing engulfing pattern formation in july... and the brokerages which were positive earlier for the first time started downgrading the stock....
@capsule91, thanks trader. Keep posting charts and sharing knowledge.