Head and Shoulders Pattern: This is a popular chart pattern in technical analysis that can indicate a potential trend reversal. It consists of three peaks: a higher peak (head) between two lower peaks (shoulders). It suggests that the stock's price might change direction from an upward trend to a downward one.
Left Shoulder, Head, and Right Shoulder: These refer to the three peaks in the pattern. The left shoulder has a high of 2543, the head has a high of 2630, and the right shoulder has a high of 2559. The head is the highest point among the three.
Breakdown Target: In a head and shoulders pattern, analysts often measure the potential downward movement after the pattern completes. The "height of the head" is the vertical distance from the head's high to the neckline (more on this in the next point). In this case, the height of the head is 2630-2473=2316.
Neckline: The neckline is a support level that connects the lowest points of the two troughs between the peaks (shoulders) in the pattern. In this case, it seems like the neckline is at a value of Rs. 2473.
Breakdown of the Neckline: A significant event occurs when the stock's price breaks below the neckline. This is seen as a confirmation of the pattern and a potential signal for a trend reversal. In this scenario, if Reliance's stock price drops below Rs. 2473 (the neckline), it suggests a potential further decline in price.
Downside Target: The "156 point downside in reliance" refers to the expected price movement if the breakdown occurs. It's calculated by taking the "height of the head" (difference between head high and neckline) and subtracting it from the neckline value. So, 2630 - 2473 = 156.
In summary, the analysis suggests that if Reliance's stock price breaks below the neckline value of Rs. 2473, there could be a potential downward movement of 156 points in the stock, based on the head and shoulders pattern on the hourly time frame. This type of analysis is used by traders and investors to make informed decisions about buying or selling stocks.
The information provided here is for educational and informational purposes only. It does not constitute financial advice, and I am not a financial advisor.
Disclaimer: Trading stocks and making investment decisions involves inherent risks, and you should always conduct thorough research and consider seeking advice from qualified professionals before making any financial decisions. The analysis presented, including the target price calculation, is based on technical patterns and historical data, which may not accurately predict future price movements. The actual performance of stocks can vary widely from any analysis or prediction. Always exercise caution and due diligence when making investment choices.
Thank you.
Left Shoulder, Head, and Right Shoulder: These refer to the three peaks in the pattern. The left shoulder has a high of 2543, the head has a high of 2630, and the right shoulder has a high of 2559. The head is the highest point among the three.
Breakdown Target: In a head and shoulders pattern, analysts often measure the potential downward movement after the pattern completes. The "height of the head" is the vertical distance from the head's high to the neckline (more on this in the next point). In this case, the height of the head is 2630-2473=2316.
Neckline: The neckline is a support level that connects the lowest points of the two troughs between the peaks (shoulders) in the pattern. In this case, it seems like the neckline is at a value of Rs. 2473.
Breakdown of the Neckline: A significant event occurs when the stock's price breaks below the neckline. This is seen as a confirmation of the pattern and a potential signal for a trend reversal. In this scenario, if Reliance's stock price drops below Rs. 2473 (the neckline), it suggests a potential further decline in price.
Downside Target: The "156 point downside in reliance" refers to the expected price movement if the breakdown occurs. It's calculated by taking the "height of the head" (difference between head high and neckline) and subtracting it from the neckline value. So, 2630 - 2473 = 156.
In summary, the analysis suggests that if Reliance's stock price breaks below the neckline value of Rs. 2473, there could be a potential downward movement of 156 points in the stock, based on the head and shoulders pattern on the hourly time frame. This type of analysis is used by traders and investors to make informed decisions about buying or selling stocks.
The information provided here is for educational and informational purposes only. It does not constitute financial advice, and I am not a financial advisor.
Disclaimer: Trading stocks and making investment decisions involves inherent risks, and you should always conduct thorough research and consider seeking advice from qualified professionals before making any financial decisions. The analysis presented, including the target price calculation, is based on technical patterns and historical data, which may not accurately predict future price movements. The actual performance of stocks can vary widely from any analysis or prediction. Always exercise caution and due diligence when making investment choices.
Thank you.
Comment:
Again approaching neckline
Trade closed manually:
Reliance seems not breaking the neckline.