L&T Finance | Short Below 128 | Stop-loss 134 | Target 105 |
It's a broadening top formation. And pretty much like what the textbook describes. Be careful because nice-looking patterns are rarely successful.
If price closes above the upper trendline before breaking 128 then the trading setup becomes invalid.
The 4 hour chart of dollar index has formed a bullish trend line.
Based on the price action,we expect the broken trend line to act as strong resistance.
Also the point 95.53 is acting as a strong resistance. Hence we expect the price action to be bearish and find support at trend line.
The 2-hour chart of GBP/CAD indicates that the pair is currently in uptrend.
The pair is currently trading in up channel formation.
It is currently trading around the lower trend line,which can act as a good support for buyers.
On the contrary,if the support breaks, a major sell off can be seen.
The stock is in uptrend so one should follow the trend until it changes and try to enter long at appropriate level. The stock has formed a Broadening Formations and yesterday's Green bar and today's trading above it are indicating a potential long at this level. Stop Loss closing below the lower line.
It is been observed on the Hourly Chart that the price action forms a U shape Cup and a channel shape "Handle" in order to complete the a cup-handle pattern. Measurement is the interesting part of it as it is been respected accurately.
I hope it adds value to your trading experience.
The pattern is also called Megaphone. It has also formed 3L-Reversal at the top so one can short the stock wherever stop loss of 139.9 on closing basis is affordable. If the pattern works one can expect the price to touch the lower line around 112. Safe trader can book the profit on fib level that too offers a good risk to reward ratio