Bullish Reversal - Inverse Head & Shoulders Pattern
Instrument: TATA Consultancy Services (TCS) - NSE
Timeframe: 1 Hour
Pattern: An Inverse Head and Shoulders pattern has formed, indicating a potential bullish reversal.
Key Observations:
The Inverse Head and Shoulders pattern is still forming, but entering early at the Right Shoulder can provide an improved risk-reward ratio
Early Entry Plan:
Entry: Near the Right Shoulder level at ₹4,080.
Stop Loss: Below the Head level at ₹3,990 (key support).
Target 1: ₹4,130 (Neckline resistance).
Target 2: ₹4,280 (mid-term target).
Target 3: ₹4,400 (pattern target).
Rationale for Early Entry:
Entering near the Right Shoulder minimizes the stop-loss distance while allowing for participation in the potential breakout.
Risk-Reward Ratio: Early entry improves the ratio significantly compared to waiting for a neckline breakout.
Indicators for Confirmation:
RSI Divergence: Look for RSI to stay above 40 to confirm bullish momentum.
Volume: Accumulation near the right shoulder level indicates stronger bullish interest.
Caution:
If price breaks below ₹3,990 (Head level), it invalidates the pattern.
Timeframe: 1 Hour
Pattern: An Inverse Head and Shoulders pattern has formed, indicating a potential bullish reversal.
Key Observations:
The Inverse Head and Shoulders pattern is still forming, but entering early at the Right Shoulder can provide an improved risk-reward ratio
Early Entry Plan:
Entry: Near the Right Shoulder level at ₹4,080.
Stop Loss: Below the Head level at ₹3,990 (key support).
Target 1: ₹4,130 (Neckline resistance).
Target 2: ₹4,280 (mid-term target).
Target 3: ₹4,400 (pattern target).
Rationale for Early Entry:
Entering near the Right Shoulder minimizes the stop-loss distance while allowing for participation in the potential breakout.
Risk-Reward Ratio: Early entry improves the ratio significantly compared to waiting for a neckline breakout.
Indicators for Confirmation:
RSI Divergence: Look for RSI to stay above 40 to confirm bullish momentum.
Volume: Accumulation near the right shoulder level indicates stronger bullish interest.
Caution:
If price breaks below ₹3,990 (Head level), it invalidates the pattern.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.