Is Vardhman Textiles looking for a breakout?
Updated
The wind for Indian markets as of now have become uncertain , just like the state of the world economy. From large fund managers to small retail investors are addled, and the only question out there is 'Where will the market move?'.
Now's the time when tons of quarterly results are laid in front of investors from all the listed companies there are. Thus, the next move will solely depend on how investors perceive these numbers.
But we traders can't stop looking for opportunities even in times like these, and there is one such opportunity I can smell in Vardhman Textiles.
When you see the chart from a 4-H timeframe you can easily point a downward channel where price is currently hovering at the upper end of the channel. For now, ignore the head and shoulders and just focus on the channel cause there lies a valuable price action lesson for you.
If you see the bottom of the channel, you will notice that when the price touches that part of the channel it immediately retract and move northwards. This means that market sentiment becomes heavily bullish here and its not just a one-time occurrence, its happening almost every time. This checks the relevancy of support line for us.
Now moving next to the inverted head and shoulders pattern. Its a bullish pattern and we all know that, plus its formation on the upper end of the channel gives us a clear signal that this stock is looking for a breakout.
The move of the price away from the bottom of the channel with such ease gives a feel of bullishness in the air and this inverted head and shoulders clears the run way for our bullish flight.
The only thing is that I cannot guarantee that it will work and there is no such thing as 100% in this universe. All we can do is work on probabilities.
So if a breakout happens then our immediate target will be 338.85. When this level is breached we can target for 357.15. Here, we can expect a small profit taking which will halt the upward surge of the stock for a short time. Our main target will be 370.50 and I'm really looking forward to that.
But if everything goes opposite to our plan and the price remains contained in the channel then we know where our support lies.
Remember this is a swing trade and if a breakout occurs then it would take 15-20 days at least to reach to our target. If all go well then you can shorter the time for the target to hit.
Now's the time when tons of quarterly results are laid in front of investors from all the listed companies there are. Thus, the next move will solely depend on how investors perceive these numbers.
But we traders can't stop looking for opportunities even in times like these, and there is one such opportunity I can smell in Vardhman Textiles.
When you see the chart from a 4-H timeframe you can easily point a downward channel where price is currently hovering at the upper end of the channel. For now, ignore the head and shoulders and just focus on the channel cause there lies a valuable price action lesson for you.
If you see the bottom of the channel, you will notice that when the price touches that part of the channel it immediately retract and move northwards. This means that market sentiment becomes heavily bullish here and its not just a one-time occurrence, its happening almost every time. This checks the relevancy of support line for us.
Now moving next to the inverted head and shoulders pattern. Its a bullish pattern and we all know that, plus its formation on the upper end of the channel gives us a clear signal that this stock is looking for a breakout.
The move of the price away from the bottom of the channel with such ease gives a feel of bullishness in the air and this inverted head and shoulders clears the run way for our bullish flight.
The only thing is that I cannot guarantee that it will work and there is no such thing as 100% in this universe. All we can do is work on probabilities.
So if a breakout happens then our immediate target will be 338.85. When this level is breached we can target for 357.15. Here, we can expect a small profit taking which will halt the upward surge of the stock for a short time. Our main target will be 370.50 and I'm really looking forward to that.
But if everything goes opposite to our plan and the price remains contained in the channel then we know where our support lies.
Remember this is a swing trade and if a breakout occurs then it would take 15-20 days at least to reach to our target. If all go well then you can shorter the time for the target to hit.
Note
Today at 03-05-2023 our first target of 338.85 on this stock is achieved. From here, We can expect a minor correction due to the profit booking by many investors which is evident. Also, the stock price is moving at expected pace which is good for our targets to hit in appropriate time.
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