Current structure of SBIN a participant from public sector banks is suggesting a potential set up of “Three Hills and A Mountain” chart formation.
The above said pattern is rare, but a very reliable pattern and consists two trade setups; one "short" and one "long."
Stocks gradual up move from Rs .241.10 (January 2017) to peaks of Rs .315.30 (May 2017) making higher tops and bottom formation resulted into three hills formation,1st ( Rs .282.80), 2nd ( Rs .298.75) and 3rd (315.30), where each hill retraced 50%-61.8% of its height before expanding into the next hill .
After completion of the "Three Hills," SBIN offered 1st trading opportunity going short when it breached the upward sloping (Blue coloured line) at or below levels of Rs .290 on the closing basis for the targets of Rs .269 which is 61.8% of entire upmove (AB) from Rs .241 to Rs .315 and as accordingly the stock corrected till Rs .269.70 as on (June 2017).
After completion of 1st trade near 62% ( Rs 269-270) of the prior range, stock has another important reversal to the upside (D), the "Mountain" which rallies about 100% to 127% ( Rs 315-328) respectively, of the entire hills range (AB) as the pattern rule suggest.
We believe that the stock has a potential to move upwards and achieve the defined pattern targets in near future. Hence recommend a Buy at CMP and at any dips ( price range Rs .270-275), stoploss and targets as mentioned above.