Hello all,
Herein I share my observations on Grasim industries on daily chart! Due to multiple observations, the chart may look a bit clumsy, but try to study the chart alongside explanation.
Formation:
After a healthy fall from 830 odd zone till 390 zone, counter is in sideways consolidation with positive bias. This consolidation seems like a symmetrical triangle of which, breakout remains pending. The resistance line is placed at around 540. The last leg of formation can also be seen as inverse head & shoulder. Neckline is placed at same level of the resistance line of symmetrical triangle formation.
Ichimoku Clouds:
In today's trading session (20th May), the counter has managed to enter the cloud zone, levels being 515, sustaining in the zone would open doors till higher zone of cloud, placed near 600 zone.
Moving Average:
50 periods EMA is placed right near the resistance line of the symmetrical triangle. This may act as a resistance for time-being, but may act as role reversal support, once crossed.
Candlestick formation:
Yesterday's trading candle seems like a bullish harami pattern (though not exactly as per definition). (Certainly not sufficient to trade as it's within the symmetrical triangle formation, but definitely supporting any bullish formation)
Fibonacci:
Extension levels are highlighted using blue color on the right side of the chart. On symmetrical triangle breakout, we can expect the counter to reach 'at least' 100% of the first wave, which is placed in the vicinity of 650.
Fibonacci:
If reverse retracement is taken right from the top of 840 to the bottom of 390, 61.8% level turns up at 665, which is coinciding with the extension level.
RSI:
RSI indicator is firmly placed at 52.50, which may support any kind of emerging trend.
Volume:
Higher activity is seen in present consolidation compared to the previous fall. This may just be because of the thrust to accumulate quality stock at a decent valuation. This is certainly a neutral indicator as of now. But it can definitely support trend going forward.
Wave:
Not explaining in detail, but it seems flat correction is underway. Wave A (ABC) and wave B (ABC) are done. Impulse may emerge soon.
Putting all together, the pattern breakout and EMA crossover remains pending (540 zone) as of now. But Ichimoku cloud and wave emergence, along with strong RSI and candlestick formation is supporting early entry too.
Strategy:
The covered call strategy seems perfect as of now. One can initiate long position with short on call. 8 trading sessions are remaining to expiry. One can earn time decay too.
Keeping the risk-reward ratio and own temperament in mind, one can initiate trade.
- Kunal Rambhia
Herein I share my observations on Grasim industries on daily chart! Due to multiple observations, the chart may look a bit clumsy, but try to study the chart alongside explanation.
Formation:
After a healthy fall from 830 odd zone till 390 zone, counter is in sideways consolidation with positive bias. This consolidation seems like a symmetrical triangle of which, breakout remains pending. The resistance line is placed at around 540. The last leg of formation can also be seen as inverse head & shoulder. Neckline is placed at same level of the resistance line of symmetrical triangle formation.
Ichimoku Clouds:
In today's trading session (20th May), the counter has managed to enter the cloud zone, levels being 515, sustaining in the zone would open doors till higher zone of cloud, placed near 600 zone.
Moving Average:
50 periods EMA is placed right near the resistance line of the symmetrical triangle. This may act as a resistance for time-being, but may act as role reversal support, once crossed.
Candlestick formation:
Yesterday's trading candle seems like a bullish harami pattern (though not exactly as per definition). (Certainly not sufficient to trade as it's within the symmetrical triangle formation, but definitely supporting any bullish formation)
Fibonacci:
Extension levels are highlighted using blue color on the right side of the chart. On symmetrical triangle breakout, we can expect the counter to reach 'at least' 100% of the first wave, which is placed in the vicinity of 650.
Fibonacci:
If reverse retracement is taken right from the top of 840 to the bottom of 390, 61.8% level turns up at 665, which is coinciding with the extension level.
RSI:
RSI indicator is firmly placed at 52.50, which may support any kind of emerging trend.
Volume:
Higher activity is seen in present consolidation compared to the previous fall. This may just be because of the thrust to accumulate quality stock at a decent valuation. This is certainly a neutral indicator as of now. But it can definitely support trend going forward.
Wave:
Not explaining in detail, but it seems flat correction is underway. Wave A (ABC) and wave B (ABC) are done. Impulse may emerge soon.
Putting all together, the pattern breakout and EMA crossover remains pending (540 zone) as of now. But Ichimoku cloud and wave emergence, along with strong RSI and candlestick formation is supporting early entry too.
Strategy:
The covered call strategy seems perfect as of now. One can initiate long position with short on call. 8 trading sessions are remaining to expiry. One can earn time decay too.
Keeping the risk-reward ratio and own temperament in mind, one can initiate trade.
- Kunal Rambhia
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