Wednesday, February 06, 2013

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Stock Ideas

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  1. This weekly chart shows a rounding (saucer) formation. And a complex HnS as a pattern within pattern.
  2. We have a BO above NL, a decent rally of 10+ percent. Prices have also retraced back to the NL, and is now testing it.
  3. ROC is testing a support TL, and RSI is in the Bull Zone.
  4. Nothing is confirmed yet, but still a bullish picture unless we break strongly below the NL.
  1. On the daily chart, the up move which broke out above the NL, looks like an impulsive move.
  2. Now prices have retraced in 3 waves.
  3. The last leg of this move is resembling an ED in wave (5) of [c].
  4. We have a resistance line on ROC, a BO above this line may give an advance signal of an impending up move.
  5. RSI and ROC are also showing a positive divergence.
Note: No action should be taken in anticipation of a trend reversal. Unless prices confirm a reversal, no commitment should be made.
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Dean is a fulltime trader for last 13 years. He is passionate about technical analysis. His instruments of choice are Nifty and banknifty futures and options. His main analysis and trading tools include advanced techniques like Market Profile, Voilume Spread Analysis and Order FLow Analysis. Dean is a teacher at heart and loves sharing his learnings with committed traders. You can check out his courses here...

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4 comments:

  1. Ashish Agarwal7 February 2013 at 14:29

    What an eye Sirji... a very clear chart ..thanks for sharing

    ReplyDelete
    Replies
    1. Aniruddha Deshpande8 February 2013 at 13:12

      Dear Ashish,
      Thanks for the appreciation.
      Regards
      Aniruddha

      Delete
  2. hari17 February 2013 at 16:23

    could you pl interpret why this pattern & LT got failed?

    ReplyDelete
    Replies
    1. Aniruddha Deshpande20 February 2013 at 11:52

      Dear Hari,
      Patterns can and do fail. If an opportunity presents itself, it does not guarantee success. Stocks generally move with broader markets, if indices go down, so do most of the stocks, may be that was the reason for this patterns failure.
      But that is not the correct way to look at it. Patterns are what we see in the price actions, markets do not see it, they do what they want to do. So what is the use of patterns then, firstly they are useful for one and only one purpose, to help us control the risk, the amount we can loose on a trade. And in this case we knew what could be the point where out trade is invalidated, and that is all. Secondly, these patterns have shown over the years a higher probability of a trending move following them. So a decent probability (even 50% is great) plus a clear invalidation point, is what we can get out of any classical TA pattern, and that in the long run should contribute to our success.
      Regards
      Aniruddha

      Delete

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