After long term correction, stock has given a breakout of a long term downtrend line & restested as well. On observation we can find an inverse Head and Shoulder pattern. The prices has given a breakout above the neckline of the inverted H&S with strong volume on weekly chart.
On the perspective of wave analysis, we can clearly count the up move from the bottoms to the necklines a full impulse 1-2-3-4-5 as wave- (i) and the right shoulder correction as a wave -(ii). The Breakout above the neckline (wave-(i) should be considered as the starting of the wave-(iii).
One should buy the stock on current levels & add on dips till the neckline level. Maintaining a stop loss of 160 one should one should remain invested and look for the measured target for inverse H&S as 330 and wave-iii minimum target guideline as 345. holding these levels in future , stock will likely to move upwards for the targets of 450 area.
INVESTMENT STRATEGY:
Buy on cmp : add on dips, SL: 160 tgt: 330-345 /400/450
This stock will have to retrace to 205-210 levels( previous resistance turned support) and prove its buyers presence for such high targets. It has stiff resistances at 250 range and then 275 range followed by the psychological level of 310 range(this will be toughest to break on the upside). With a move of 50% already in last 5 weeks , some consolidation and buildup is necessary for further up move
@akrock861, I am orthodox in my technical analysis and rely on more proven approaches. EW is very subjective in nature. While I do not dismiss its relevance , I personally do not rely on it or use it. Having said that, my analysis does not disregard the up-move. It only adds more insights from my point of view.
Hi Sir, Great analysis. I have one query. Could you please help me out. Why isnt the level at 288 considered for target. It acted as support/reversed and from there stock went up.
TradingSutra
⋅
@kumaransiva1412, that can be a target on lower time frame.
UnknownUnicorn7125679
⋅
@TradingSutra, so you ll close the trade at 288 at higher time frames only if the higher low is broken in that lower time frame? Speaking of lower time frame, how low can we go considering this is a weekly chat? And do you wait for a complete week's candle close above level or enter before that? Coz moving up in daily and create a wick and close below the level in weekly.
TradingSutra
⋅
@kumaransiva1412, As per wave analysis 288 is not an important level. If this is 3rd wave it will hit the equality region at least.