Possible Bearish Gartley in LT - 28th Aug 09

Update on 31st Aug 11.55 PM:

It didn't give opportunity to enter short trade yet.

LT Chart - Daily:

LT formed a possible Gartley pattern in daily charts. Point "D" is still underdeveloped, that's why I am calling it as "possible". Will update on this, watch out for confirmation and entry.

Some Patterns from Yesterday (July 01)

These are the some stocks I was tracking yesterday, and I couldnt post on the blog due to lack of time. Posting them now for sake of record and study purpose.

Bearish ABCD Pattern in Reliance, which has perfect AB=CD and the retracements were good. CD is exactly the 100% extention of AB. Below is the 5 min chart of Reliance:

Golden Renuka :), Which was perfect trade for today.

Bearish ABCD Pattern in Renuka sugars. This is the perfect ABCD pattern with golden ratios.

AB is perfectly equal to CD. Below is the 5 min chart of Renuka Sugars:

Failed break out in LT (Wyckoff Terminal Uptrust). Below is the 5 min chart of LT:

L&T - Longer Term Analysis

Longer Term Analysis on L&T, also, discussing about the Cup & Handle pattern posted earlier. Here is the daily chart:

Right-angled Broadning Triangle formation is clearely visible in the daily charts, marked with yellow dotted lines. Volumes are also expanding along the way, supporting the pattern. But past one month volumes are declining, which indicates some weakness in the up move.

Now, Cup and Handle Pattern has formed exactly below the resistance line of the Righ-angled Broadning Triangle, marked as thick Red line. It is wise to wait until this resistance line is broken convincingly to take up the long trades even for Cup and Handle. Once the resistance line is broken convincingly, the stock could be bought and held for longer term as it has the potential to reach upto Rs.2200.

Update on 8th June: Long Not triggered, as break out didn't happend with volumes.

Cup and Handle in DLF,L&T and Nifty Futures

After the dramatic move of 18th May, some of the scrips slided down & consolidated with low volumes and then slowly moved up forming the rounding pattern. From past 2 days, consolidation can be seen with low volumes, which is acting like handle to the rounding bottom (Cup). Break out from the handle resistance line with good volumes will give confirmation to the pattern. Stop loss should be at the handle low - filter.

About Cup and Handle Patterns: Cup and Handle or Rounding Bottom acts as a good accumulation pattern. The gradual down move of the price with decreasing volumes shows that the selling pressure is reducing. At the center, the price is lowest with low volumes as the supply and demand are balanced. As the demand increases price slowly moves up with the volumes expanding. At the peak again high volumes show the climatic demand. If the supply increases dramatically and the prices are coming down with high volumes then this may form as double top pattern. If the prices are moving down slowly or consolidating sideways with low volumes then it indicates that supply is diminishing.

When the fresh buying starts volumes increases significantly and the new highs are made, as the sellers at the previous top close there positions and new buyers coming in, causing the price to zoom up. This pattern works as a continuation as well as reversal (inverted cup and handle) and has a very good risk-reward ratio.

DLF: Price pattern is good with bowl shaped volumes support. Below is the DLF chart

L&T: Price pattern is good with bowl shaped volumes support. Below is the L&T chart

Nifty Futures: Price pattern is good, but the volumes are not increasing in the up move. Most of the times, Nifty up move is necessary for the success of the others scrips. Below is the Nifty futures 15 min chart.

There are some more scrips which formed Cup and Handle Pattern, please post if any one find them and like to discuss.