Right click and click on view image to see a magnified chart
Bajaj Auto has been on an upward journey from 1800 to a high of 2225. The chart shows a Head and Shoulders pattern. It is a top Reversal pattern.
The red horizontal line is the neckline.
S 1 is left shoulder.
H is head.
S 2 is right shoulder. The right shoulder is not seen very clearly in this daily chart. The single bullish candle is the right shoulder. It is seen very clearly in the shorter term intra day chart as shown below.
The green arrow shows the breakdown from the neckline.
The red arrow points to the increased volume on the day of the breakdown.
The target for this down move is 1925 [150 points down from the breakdown point of 2075].
Below is a 4 hourly chart of Bajaj Auto showing the Head and Shoulders pattern very clearly.
Also note the increased volume at breakdown point.
The yellow horizontal line is the neckline.
Source: Falcon : Reliable Software
Right click and click on view image to see a magnified chart
Disclaimer: The views given in this blog are for educational purposes only. Readers should exercise personal discretion and take expert advice before taking any action in the stock market.The author of this blog is not responsible for any losses which anyone might incur in the stock market by acting on these views.
How does one calculate the target?
ReplyDeleteIs your target based on Fibonacci retracement?
I'm assuming the following:
Upmove 1800 to 2225 = 425
Retracement (69-70%) = ~300 from top.
Target = 2225-300 =1925.
Is it right?
The height of the head [top of head to the neckline]is 150 points.The downward target is the height of head from the breakdown point [neckline].
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