Trend Reversal - Bearish Belt Hold & Engulfing Candle stick
1. Support levels are highlighted as S1, S2 & S3
2. Heavy Selling
3. Negative News
Belthold
ADANI PORTS - JOURNEY OF THE SINKING PORTGuys today we are going to discuss about Adani port initially I would would discuss how it was in a uptrend, there after I will show that how we could have identified that it will turn into a down Trend.
(Please open this post in a Separate Tab. And using mouse click on the chart and move cursor to the left to see the remaining part of the chart)
Adani port was in a uptrend starting from 2017 initially creating series of higher highs and Higher Lows.
In this chart, the first two are the base low and base high. The Lows and High thereafter created are used to draw trend lines / channel which is being followed.
The points of reversal have been highlighted along with corresponding pattern they are forming. The share followed a fixed channel for 11 Straight months. The details of Highs and Lows during these 11 months are as below: (refer chart as well)
Higher Low 1 – No Specific Pattern here. Normal reversal was here. Since we now have 2 Lows (Base Low and Higher Low) these are used to create a trend line .
Higher High 1 – The share was near its its historic resistance and created Hangman pattern (Reversal Pattern) and thereby reversed from here.
Higher Low 2 – The Share was near its Lower Channel and created an Inside Bar Pattern which indicated reversal. The share moving up thereafter.
Higher High 2 – The share was near Its upper channel and created a Doji (Confusion after a series of uptrend) near the resistance, which indicated Confusion after a series of uptrend. Traders were unsure whether the share will continue its upward trend or not and there share started reversing from here.
Higher Low 3 – The shared touched the lower channel and the immediately next candle made a Doji / Hammer but it was formed below the Lower Channel. Doji / Hammer indicates weakness in the ongoing trend. So, though share was trading below lower channel, same could not be considered as a breakdown. Also, the share reversed post this.
Higher High 3 – The share showed certain consolidation and confusion in the market. So no specific pattern formed here.
Higher Low 4 – In the process to make next Low. The share breached Channel and the next 2-3 candles including one big red candle) was formed below the channel thereby confirming breakdown. The share thereafter created Hammer Pattern and reversed from here.
Now although On First December it created a higher Low (which indicates uptrend) it gave a channel breakdown. Thereby giving hints of further breakdown. But Since we always follow multiple confirmations, we would not trade a simple breakdown and would require more surety to ensure the same.
The share further moved on make a Higher High 4 and reversed with Bearish Engulfing Pattern.
The share then continuously moved down and created a Lower Low. As mentioned in the first part, the first indication was the Channel Breakout and Lower Low gave the second confirmation of downfall coming up. Here we should rely on the confirmation and find a good level to short the share.
Since the share is near its crucial support, it would be correct to short this share if :
1. It breaks support with Volume
2. If reverses from Support, we should short near next resistance.
The share as expected took support of the major support at 350 and reversed from here creating a Bullish Belt Hold Pattern.
Since then the share has formed a channel between support and resistance and moving in between. Shorting near resistance and Going long near Support would have been a good strategy.
On 22nd the share broke the support with Volume , there confirming the further breakdown..
Historic Support and Resistance have great significance and such levels are always respected by the shares. Further double confirmation should be used while taking position.
Every person has different way of analyzing shares. Some follow Candlestick Patterns, Some follow trend-lines, some follow Elliot Wave and there is nothing wrong with any of these methods. Each of these methods is successful in their own and you need to believe in the strategy you believe and religiously follow it.
Just to hold onto your faith and continue with your strategy. Even the basic Candlestick patterns have the ability to reap you awesome results.
Thanks, i hope this is Helpful.
Keep sharing the list of shares you want an analysis on. Thanks :)
PS : All views welcomed if they intend a fruitful discussion. And If Warren Buffet says he still learns, who are we to say or believe that we know all. Lets learn together and Earn together.
#JOURNEYOFATRADE
