Reliance communications has more than doubled in past two months. The counter has rallied from lows of Rs. 50 odd levels to Rs. 130 odd levels outperforming the index.
Is there still an opportunity left in the entity to trade on long side?
The boost for the entity also supported fundamentally and technically kind of double bottom formation on daily chart and a non-stop rally from 50 to 111 odd levels. Then stated its consolidation phase in the process forming an expanding triangle.
Expanding triangle formations are one of the unprofitable patterns to be traded. After breaking out of the pattern again a throw back occured in the entity below 120.
RCOM Daily Chart
The half way point and the 23.6% retracement of the entity comes around 111 and 38.2% retracement of the move from 50 -130 is 100 odd levels and the lower end of triangle.
Break below 100 can drag the stock towards 82 odd levels which is the strong support for the stock or If support held as 100 can move extensively higher. Although based on Eillot Wave Theory stock is on the 2nd corrective wave. Once reverses can start moving up 3rd impulse move which can have a targets of _ _ _.
So trade objectively and wisely with the consideration of own risk and volatility. The strategy would be to wait patiently for the right opportunity to unfold to probable profitable trade setups.
Raju V Angadi
Equity Research Analyst
To know more about probable counts contact us back on rvangadi@googlemail.com
Disclaimer: This is just an view based on the research of individual. So kindly trade along with the consultation of your financial adviser, market trends, price action and own risk appetite considered while investing or trading in stock markets.
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