Expanding Triangular pattern in RCOM

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.

S & P 500 Analysis

S & P 500 (US Index) is in a secular bull trend from March 2009, which has more than doubled from lows of around approximately 700 odd levels to 1680 odd levels. The daily chart has held the intermediate trend line and has  bounced back from the lows perfectly.

Fig 1. S & P 500 Daily chart

The indices is on the verge of making a final top. Also near the 20 DMA which comes around 1646 (Fig. 2) break above can see a rally towards 1675 - 1680 odd levels. 

The gap up of (6/6/2013) which is 1622.56 and a low of 1625.27 (7/6/2013) also favoring the bulls unless it has been closed within few trading sessions to be void. 

As shown in the chart below the index has bounced perfectly from the lower channel of bolinger band which is aroun 1602 and the willams % R was also indicating oversold region in short term.

In case of a symmetrical triangle formation ?

Scenario 1 - move above 20 DMA 1646 - 1677 back towards 1620 then a upward break above 1655 odd levels can lead the indices final leg on upside towards 1692 - 1750 odd levels.

Scenario 2 - 1646 held and again a downward trend resumes. A warning sign can be seen below 1600 and 1580 odd levels. A confirmation of downtrend can be assumed below 1550 odd levels. The indices could confirm a medium term top with targets 1500 - 1480 - 1450 and 1400 and further much below. 

Fig 2. S & P 500 Daily chart

So next 3-6 of weeks can unfold the index direction with the formation of complete pattern. Fundamentally FOMC (Federal reserve) meet held on June 19th 2013 can be a trend changer is well. 

Here patience is the virtue of the game.

S & P 500 is one of the widely tracked and traded indices across the globe. Intermarket analysis is vital while trading even in domestic markets. The correlation exits between financial markets across the world in financially inter related economies. So global macros also needs to be considered. 

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.

  

ACC technically looking weak

ACC has formed a Bearish pattern formation. Today has given below break down below diamond top. Also break below 1200 would confirm with higher volumes more weakness in the counter with another bearish pattern.

Fig 1. ACC Daily Chart 

                                                               Fig 2. ACC Daily chart 

                                                                Fig 3. ACC Daily chart 

The chart structure of the entity showing bearish pattern formation as displayed above in Fig 1 & 2 daily charts. Further the short term and long term trend lines have been breached as shown in Fig 3.

Fibonacci ratios applied on long term charts shows it has even retraced below 50%, which further can head towards 61.8% and more as shown in the chart below.

                                                    ACC Daily Fibonacci Chart 

Thus, one can short the stock around any bounce up to 1230 odd levels with stop loss above 1250. The eventual target for the counter would be 1 _ _ _ and 1_ _ _. So the stock can under perform in near term. It is advisable for long traders to exit the counter only positions can be built decisive break above 1250.

So trade objectively and wisely with the consideration of own risk with amid 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.