RSI Overbought on Weekly Chart and looks like Nifty to form a Evening Doji Star Candle pattern. Its indicating the bearish movement on Nifty and the levels are measured by fibonacci.
The price movement are being captured beautifully by Bollinger Band and one can observe that whenever it has traded out of the band, it has given a nice opportunity to trade the reversal. We can apply the same method and short the stock by providing appropriate stop loss and look for the target of middle/lower band.
Today's big Black candle which engulfed the last 2 candles and closed at lowest level is showing the forthcoming weakness. It is also showing bearish divergence in the overbought Zone. One can short the stock at the level where Stop Loss of 1102 on closing basis is affordable to them.
With reference to my previous post on learning how to use RSI Divergence for trading. I've observed a beautiful trade is developing. The trade is almost ready so one can put it into their watch list, observe the price movement and take timely action.
Divergence are lucrative and effective method to trade, however many people find it difficult to use so I am giving important points one should keep in mind:
1. RSI divergence should be used when formed in overbought or oversold Zone. Others may be used in combination with other studies but NO trade solely based on it.
2. Since we are handling here the situation...
ABIRLANUVO perfect balance sheet company. The company will be in the correction mode now. One can buy it at the level of 1331 with the target of 1450 in coming days.
Even RSI is showing overbought as of now.
Nifty is showing the same pattern which it shown earlier. The nifty will fall till the level of 8415 in future and again raise with the target of 8799 in few weeks
ABCD Diamond formation on Sun TV. RSI Overbought condition and it may have correction.
Trade:
Short Below - 514
Target 1 - 508
Target 2 - 500
Stop Loss - 520
Reward Points - 14
Risk Points - 6
