A Pattern formation has been witnessed and looks to have completed in the stock of NTPC from its low price of 107.10 to its recent high price of 178.85. The same can be visible from the given chart as shown.
After the completion of this , the stock of NTPC seems to be in corrective zone and looks like forming a simple (5-3-5) corrective pattern, though it is too early to predict the possible corrective formation. However, at first look it looks to be forming the simple pattern.
The first leg, wave 'A', of this simple pattern, looks to have completed its first three waves, is about to complete or have completed it fourth wave and will complete its last wave five over next few days. A parrallel channel has been drawn to show the possible resistance and support point for making entry or exit.
Secondly, the stock is witnessing sideways movement as against the sharp fall in the third wave of wave 'A'. This indicates that the stock has little less interest of retracing this fall aggressively. The upper line of the parrallel channel may act as resistance line. A decisive breach of resistance line with sharp rise in price with , may negate the possibility of the formation.
The stock of NTPC can be sold/shorted at current price of 160 for the price targe of 154, 150 and 144 with stop loss of 167.