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Chart Patterns

Elgi Equipments ELGIEQUIP - Positional Trading I have based my analysis on Stan Weinstein's framework on Weekly chart where price structure, 30 weekly MA, volume and relative strength (not RSI) play a role in analysing the trend. Personally, I like stocks near ATH because it tells me that prior resistance has been broken. It is important for me to select stocks that have strong relative strength against a particular index such as Nifty Infra in this case (Elgi makes compressors and they are capital goods for industry) or Nifty 500 the broader market. The area where price is moving up (marked with a green upward arrow) is defined as Stage 2 structure according to Stan Weinstein. After this, we see a Stage 3 structure marked with a black box. During Stage 3 structure, price is rangebound and this period can be for many weeks or months. Remember, this is where we lose TIME. And for traders (and also Investors), TIME is important. I have marked a breakout candle (in orange) and that is where I like to enter provided I see confirmation on volumes (marked with orange in the volume histogram). Stan Weinstein says Positional Traders should ride the trend and exit stocks only when they start trading below the 30 weekly MA. He further says not to buy in LH LL structure because there is no way one can tell how far or how long can the fall be. See for yourself how often stock stays lower. The breakout candle of 10 August 2020 is of importance. Note the volume expansion. Also note that retracement is till the mid point of the 10 August 2020 candle and stock does not fall anymore. The candles of 9 November 2020 and 7 December 2020 are also very important. The latter breaks prior pre-pandemic resistance. Around this time the Relative Strength of the stock starts outperforming against the broader market i.e. Nifty 500. Analysis is easy on hindsight. What would I do if I were to take a buy call now? I will go long only when I see a breakout candle (marked in orange) confirmed by Volumes. Because Nifty is near ATH and in Stage 3 structure, there are two things that might happen. It may again start a new Stage 2 structure or form a Stage 4 structure which is start falling from the box. Hence in a market like this, I would shift to the Daily chart, add a 50 Daily MA and if the stock breaches 50DMA and goes lower, I will exit 50% of my holding. And if it breaches the nearest swing low, I will exit completely- the candle of 27 May 2021 on Daily chart. This is a variation from Stan Weinstein's framework. Disclaimer- This is not an investment or trading buy/sell advice. The purpose is to share knowledge and learn from the community. I am not invested in the stock as on date.
NSE:ELGIEQUIPEducation
by culturalDealer79974
2
The best trades work almost right away.A breakout trade will work almost right away from the start, if the breakout happens with huge momentum and then you see Doji candles or hammer then there is a problem with follow-up. A bullish breakout must always be accompanied by a good follow up, else it cannot sustain. Bullish breakout needs good bullish candles, not Doji. Note-As soon as you enter a breakout trade it has to work within 15-20 days. If it does not move with huge momentum then exit it after 15-20days with whatever the result may be, don't wait for the stop loss to hit or for your target. The above rules apply only to Swing trade and breakout trading.
NSE:DIVISLABEducation
by Indrajit08
2
Flag Pattern Identification | Moving Average | Entry Guessing chart patterns in Higher timeframes & then moving gradually to lower timeframes for Confirmation & Entry points. Technical Indicators which I am using here is Moving average. 1. First looking at the weekly and daily timeframe, I confirmed that stock is trading above the Moving average. Also, there is an impulsive buying followed by some correction. This hinted towards a FLAG PATTERN. 2. To confirm the flag pattern and specifically the entry point, which will be candles breaking out the Moving Average line, I analyzed 4H and 1H timeframes. 3. Once I see a candle breakout at the Moving average line in an uptrend during a correction phase, I place my entry for BUYING. ** Setup stop loss and Target as per your own trading style**
NSE:KABRAEXTRUEducation
by Sanketpr
Force Motors Inverse head & shoulder breakoutSimple trend reversal pattern identification. Pattern preceded by Down trend Pattern location is very important for pattern to workout. here pattern is formed exactly at the breakout level. So chances of pattern to work out. Never follow patterns in isolation, combine other things with it. Breakout candle is having a wick, so have a cautious approach. Check BHEL Idea. How trend reversal double bottom pattern worked out
BSE:FORCEMOTEducation
by varadtambolkar
4
Bullish Flag PatternFlag Pattern is one of the most popular chart patterns, formed by price action, which is contained within a small rectangle or a channel in the shape of a flag. Flags are short-term continuation patterns that mark a small consolidation before the previous move resumes. A flag chart pattern is formed when the market consolidates in a narrow range after a sharp move. Usually a breakout from the flag is in the form of continuation of the prior trend. Flags give very relatively small risk and high and quick profits. # What is Bullish Flag Pattern? When the prices are in an uptrend a bullish flag pattern shows a slow consolidation lower after an aggressive uptrend. This indicates that there is more buying pressure moving the prices up than down and indicates that the momentum will continue in an uptrend. Traders wait for the price to break above the resistance of the consolidation after this pattern is formed to enter into the market. # Trading with Bullish Flag Pattern ? Traders can enter into a trade when the price breaks above the upper trend lines. It is formed when there is an increase in the demand that makes the prices to move up .When the demand is more than supply, price breaks outside the flag above the resistance and prices continue to move upwards. # Duration: Flags are short-term patterns that can last from 1 to 12 weeks. There is some debate on the timeframe and some consider 8 weeks to be pushing the limits for a reliable pattern. Ideally, these patterns will form between 1 and 4 weeks. Once a flag becomes more than 12 weeks old, it would be classified as a rectangle. The reliability of patterns that fall between 8 and 12 weeks is debatable. # Volume: Volume should be heavy during the breakout of flag upper boundary . #Stop Loss: A stop-loss can be placed outside the flag on the opposite side of the breakout. Kindly Let us Know if you have any question .
NSE:RELIANCEEducation
by PrasantaP
2
BULLISH FLAG PATTERN EXPLAINED.Bullish flags are a continuation pattern found in stocks with a strong uptrend. As can be observed, the pattern resembles a flag on a pole. The vertical rise forms the pole and the following period of consolidation forms the flag. The flag can be a horizontal rectangle but mostly angles down from the pole. The focus should be more on the underlying psychology of the pattern than the shape. Despite the strong vertical rally, the stock refuses to drop much because the bulls are buying as many shares they can get their hands on. ________________________________________________________________________________________________________________________ Main characteristics of a flag pattern: 1. The trend before the appearance of the pattern. 2. The channel of consolidation. 3. The volume behavior. 4. The breakout. 5. The confirmation of price movement in the direction of the breakout. _______________________________________________________________________________________________________________________ Target and Volume: The target for a bull flag is calculated by measuring the length of the flag pole and projecting it from the breakout point. The volume starts to pick up towards the end of the consolidation range indicating the oncoming breakout. Then there is a huge increase in volume when the pole is being formed and the volume tapers off during the consolidation period. ______________________________________________________________________________________________________________________ Stop Loss Options: 1. Longer term traders may place their stop loss below the entire flag. 2. A stricter option would be just below the consolidation are before the breakout. 3. The tightest option would be a two bar low trailing stop. ______________________________________________________________________________________________________________________ Thoughts: No one can know for sure which way the price will move, whether it will continue or reverse. One can follow the action of price, trade only the best setups and let the probabilities work out. While patterns may give false signals, bullish flags are generally reliable and effective. ______________________________________________________________________________________________________________________ Alert: Keep an eye out for price action unravelling currently. Price is pulling back to the 20 EMA, forming a consolidation, a flag of sorts. A continuation candle near the average with decent volumes could be the sign of a fresh move upwards. _____________________________________________________________________________________________________________________ Will be very grateful for a like and follow. :)
GEducation
by Tradeception_
7