MARUTI- BEARISH REVERSAL PATTERN
Hi All,
I hope you are all doing good :)
While going through the sector charts, Auto seemed promising and I found a really strong chart in this sector - MARUTI.
It is the leading stock for the auto sector. Let us understand how it is setting up.
After making a high in Dec 2017, the stock started correcting. Formed a base in march 20(Covid fall) and started rising. Now, this rise becomes more promising as it is being formed in a typical reversal chart pattern i.e inverted head and shoulders, which is one of the strongest reversal patterns.
For such patterns, STOP LOSS is generally kept at the bottom of the right shoulder.
How did I come up with the TARGET? Simple , calculate the distance between the neckline to the bottom of the head and mark it above the neckline.
A promising break above the neckline (green horizontal line) may give us the target as mentioned in the chart. Do note and duly keep in mind that this is a weekly chart and hence the trade could take many weeks to reach near it's pattern target.
If we do not want to wait that long, we can keep our target at 9500 (previous swing high) which will also give a good R:R of 1:2 as per the stop loss mentioned in the chart.
I would request you all to study this pattern a bit, just google inverted head and shoulders pattern and a 10 min read about the same will give you a lot of understanding of this reversal pattern. Then, you can define an entry and exit for yourself and as per your money management.
I am always open to any doubts, suggestions, feedback. You can comment or message me:)
Let's learn and earn together, Cheers!
I hope you are all doing good :)
While going through the sector charts, Auto seemed promising and I found a really strong chart in this sector - MARUTI.
It is the leading stock for the auto sector. Let us understand how it is setting up.
After making a high in Dec 2017, the stock started correcting. Formed a base in march 20(Covid fall) and started rising. Now, this rise becomes more promising as it is being formed in a typical reversal chart pattern i.e inverted head and shoulders, which is one of the strongest reversal patterns.
For such patterns, STOP LOSS is generally kept at the bottom of the right shoulder.
How did I come up with the TARGET? Simple , calculate the distance between the neckline to the bottom of the head and mark it above the neckline.
A promising break above the neckline (green horizontal line) may give us the target as mentioned in the chart. Do note and duly keep in mind that this is a weekly chart and hence the trade could take many weeks to reach near it's pattern target.
If we do not want to wait that long, we can keep our target at 9500 (previous swing high) which will also give a good R:R of 1:2 as per the stop loss mentioned in the chart.
I would request you all to study this pattern a bit, just google inverted head and shoulders pattern and a 10 min read about the same will give you a lot of understanding of this reversal pattern. Then, you can define an entry and exit for yourself and as per your money management.
I am always open to any doubts, suggestions, feedback. You can comment or message me:)
Let's learn and earn together, Cheers!
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