Sterlite Tech- Is it Going for Another Top..

In technical analysis, we examine historical data of an instrument to anticipate its future course of action. We all would agree that Price and volume are the primary and perhaps the purest form of data in technical analysis and that’s why some traders, including me, are always more inclined towards them. In this idea, I would like to share some of my observations on Sterlite Tech. which just caught my attention due to the following reasons.


2018 TOP
On the left side of the chart, we had a strong uptrend followed by a top formation. Calling it a double top won’t be a misnomer. Almost a yearlong formation and then a sharp breakdown.


2021 TOP
The stock bottoms out in 2020 with an Inverted Head and Shoulders pattern and reverses up back into 2018 top. The stock spends almost 6months in this zone (300) and forms another top here in 2021.


BREAKDOWN FAILURE
On the right-hand side, we can see a huge consolidation (into the inverted H&S of 2020) from July2022 to Feb2024 and then a breakdown of support (128). But this breakdown could not hold, and the stock is now back above 128, indicating a breakdown failure.


ANOTHER TOP
Generally, we see a sharp rally after a breakdown failure. If that happens, the stock may rally for 2021 top (260 or so). As per timeline, the previous tops were formed in 2018 and 2021. We may expect another one with a 3years gap, that is by the end of 2024.

However, we should never lower our guard and approach cautiously if the stock fails to sustain above 125 again. That would require another take on the stock.

I hope you found this analysis useful.
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Comment:

Comment:

Nice bounce from the zone today