ITC
12-24-2010
Babu Kothandaraman
Last week, I was actually asking for some help from either or all of the EW, VSA or other experts regarding the behaviour of ITC. Well! Now, it has given us some clues.
Needless to say that the stock has been in a trading range between 165 and 180 and languishing to reach the Upper channel for a while. This has resulted in a descending triangle pattern at the top of the up move. Usually, the descending triangle is a bearish continuation pattern in a fall.
If reaching the Upper channel has been a struggle, then “the least path of resistance” should logically be through the Lower channel a.k.a the Support at around the 165 levels. But surprisingly, the stock has taken this Support seriously for the past four weeks and hasn’t even tried to break it down. So, we can term this level of Support as a stronger one. At this level, it has formed a Perfect Bullish Up bar reversal pattern with the volume just a shade more than the 5-day MA of Volume. This pattern has also broken out the short-term down trend line within the channel.
The RSI and STOC has also broken out the down trend line. The indicators are showing +ve divergences.
Even though, the Volume is just average, RSI and Price breakout suggests a “Buy” for a target of 180 with a SL below 164.
Happy trading!
12-24-2010
Babu Kothandaraman
Last week, I was actually asking for some help from either or all of the EW, VSA or other experts regarding the behaviour of ITC. Well! Now, it has given us some clues.
Needless to say that the stock has been in a trading range between 165 and 180 and languishing to reach the Upper channel for a while. This has resulted in a descending triangle pattern at the top of the up move. Usually, the descending triangle is a bearish continuation pattern in a fall.
If reaching the Upper channel has been a struggle, then “the least path of resistance” should logically be through the Lower channel a.k.a the Support at around the 165 levels. But surprisingly, the stock has taken this Support seriously for the past four weeks and hasn’t even tried to break it down. So, we can term this level of Support as a stronger one. At this level, it has formed a Perfect Bullish Up bar reversal pattern with the volume just a shade more than the 5-day MA of Volume. This pattern has also broken out the short-term down trend line within the channel.
The RSI and STOC has also broken out the down trend line. The indicators are showing +ve divergences.
Even though, the Volume is just average, RSI and Price breakout suggests a “Buy” for a target of 180 with a SL below 164.
Happy trading!
Trailing Stop Loss below 175 levels
