I have read about this pattern in the Big Book of Chart Patterns and have accidentally traded using it in the Asian Paints Scrip. This is a short trade. As I am still learning about the pattern the entry and exit need to be observed. I believe there should be a pullback after which we can make an entry.
Entry Price: 155.40 (Retest Entry Technique)
After a small markup phase, the stock is consolidating. Today's bullish wick at the bottom of the rectangular pattern can be considered as a buy signal.
The idea behind this trade setup is:
1. One group of traders who trade only based on Resistance and Support will see the level of 80 as a good support area and start buying.
2. Another group of traders who trade based on the Trendline Support will also get interested at these price levels and start buying.
So that means at this level there may be more buying...
Double Top Pattern
1. Double Top Pattern is a Trend Reversal Pattern.
2. In this case the trend prior to the Double Top Pattern was clearly an Uptrend.
3. Bandhan Bank broke the confirmation line and a good entry, in this case, would have been @ 374 on 15.01.2021 using the Retest Entry Technique.
4. Target would have been the Height of the Double Top Pattern or...
Background: Kindly see my Asian Paint Short Trade Idea (Linked Below). Asian Paints was making Lower Lows and Lower Highs and was moving towards its long-term trendline. Hence, I was eyeing a short opportunity in this trade. However, my entry and exit were not great. So I have analyzed different entry techniques (credit to Franklin O. Ochoa - PivotBoss):
Amar Raja Batteries has formed the Head and Shoulders pattern. While considering a trade involving the H&S pattern we should consider the following things:
1. The prior trend should be an Uptrend, The H&S pattern is basically a trend reversal pattern.
2. The price should form an identifiable Left and Right Shoulder with a high Head. This may not always be...
Asian Paint was making a series of Lower Lows and Lower Highs. A line has been drawn in the chart connecting the Lower Highs. Also, Asian Paint is now resting at its long-term trendline support. If the support is not broken and the price stops making Lower Highs then we can go long for the targets mentioned in the chart. However, if the trendline support is broken...
I have observed that the best stocks to swing trade are those which are resting on the trendline as well as on the Horizontal Support. Two different kinds of traders enter at this location making the trade successful. NALCO is in a similar position. We can go long keeping a short target of recent High. However, a long term target is also mentioned on the chart...
Based on the price action at the trendline support, a Long trade may be planned. The previous High can be set as the short term target. If the price goes higher than the previous High then trailing Stop Loss can be used to maximize the gains. This is easier said than done. I am the absolute worst at trailing the Stop Loss :). But practice !!!
1. BHEL took support at the levels of 42.0 to 42.30 in October 2019. These were pre - Covid times.
2. BHEL took support at the same levels of 42.0 to 42.30 in the 1st week of Jan 2020. Again, the market has not yet started responding to the Covid pandemic.
The support was finally broken in February and BHEL reached the levels of 19.20. From there it made a...
Motherson Sumi has given a breakout from the levels of 175-180 with a good volume. It seems that it is already going to reach Target 1 without a retest but the lesson has been learnt from the ITC trade: No entry without a successful retest and FOMO is really dangerous.
So we can hope that Motherson Sumi gives a good trading opportunity. Cheers !!!