Tata chemicals is consolidating inside the triangle. Price action closing above the triangle will make it move towards upside. Buy above 565 with the stoploss of 560. Targets are 569,572 and 576. Always protect your profit with trail stop.
Trade active
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@ 565 on 3/14/17
Trade closed: target reached
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First target 569 reached. Trade closed manually.
Comment
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Enter and exit
Comments
Nar
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Hi Vanati, amazing that you have such a great eye finding classic patterns.
In my understanding, this is a descending triangle pattern where the price will tend to push below the base of the triangle. The reason given for this is once the price hits the first low and bounces back, that low becomes the buying price for many traders, therefore every time the price hits that target there is buying and it bounces back but little less every time. Eventually as you saw the price will fall below the base. This is usually followed by a dead cat bounce which is again witnessed in your chart. So I would anticipate a further weakness in this stock with the price falling below the 550 mark. Of course if there an euphoric opening on Tuesday then there may be a sharp upward movement, but I would use this as a shorting opportunity for Tata Chem.
vanathi
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@Nar, March 3 candle has the RSI value 53.5. March 9th candle has the RSI value 51.8 It gives the pattern hidden bullish divergence. So I thought the break will be upside. You are an experienced trader. Please explain me how to know the confirmation on divergence failure. When the divergence fails, the movement will be good. In this case divergence failure will make the price move downside. Thank you for sharing your view...
Nar
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@vanathi, I am a novice myself :) I have learnt a lot from your simple yet insightful charts, and in some ways you are my teacher.
But in my limited understanding not all indicators need to agree on the same view, more so the time scale is shorter. Your point on hidden divergence is valid, but the way the stock behaved it confirms the pattern of descending triangle. I usually prefer to look at daily and weekly patterns as well. The head and shoulders pattern on the daily charts seems to indicate bearishness on the stock.
A sharp move is likely to happen Tuesday and this will be a good shorting stock.
vanathi
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@Nar, You are right, not all the time indicators will agree with the price action. The movement of price determines whether the indicator is right or wrong. The head and shoulder pattern is a long term view compared to the hidden bullish divergence I saw. When I post my ideas here, the comments made by the friends like you improves my knowledge :)
shiv2798
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Yes I want to know your calculations on 565 ? Why it fails form 565.90 ?
Regards
Shivakumar
vanathi
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@shiv2798, Price is consolidating within the triangle. Check the BB upper band. This is how i calculated 565.
jagjeet1
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THANK YOU SO MUCH
vanathi
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@jagjeet1, Welcome. But this trade didnt get activated...
make2profit
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My personal opinion sell below 460 with sl above 468 for tgt 438-432
Eatsleeprepeat
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@make2profit, please check your levels. Short below 557 for 549 target.
In my understanding, this is a descending triangle pattern where the price will tend to push below the base of the triangle. The reason given for this is once the price hits the first low and bounces back, that low becomes the buying price for many traders, therefore every time the price hits that target there is buying and it bounces back but little less every time. Eventually as you saw the price will fall below the base. This is usually followed by a dead cat bounce which is again witnessed in your chart. So I would anticipate a further weakness in this stock with the price falling below the 550 mark. Of course if there an euphoric opening on Tuesday then there may be a sharp upward movement, but I would use this as a shorting opportunity for Tata Chem.