Combining Technicals with Fundamentals for Successful Trading Patterns
Technical analysis involves recording trading history in graphical form to predict future trends. Identifiable patterns like Cup and Handle play a crucial role in spotting entry and exit points in the market. By combining technical analysis with fundamental factors such as company performance and sector trends, traders can enhance their decision-making process and improve their chances of success.
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COMBINING TECHNICALS WITH FUNDAMENTALS Hitesh Patel, VP Conference 2017 MAIN AIM IS TO SENSITISE VP GUYS TO FIRST LEVEL TA TO SPOT EASILY IDENTIFIABLE PATTERNS
TECHNICAL ANALYSIS TECHNICAL ANALYSIS IS THE SCIENCE OF RECORDING, USUALLY IN GRAPHIC FORM, THE ACTUAL HISTORY OF TRADING (PRICE CHANGES, VOLUME OF TRANSACTIONS, ETC.) IN A CERTAIN STOCK OR IN THE AVERAGES AND THEN DEDUCING FROM THAT PICTURED HISTORY THE PROBABLE FUTURE TREND
TECHNICAL ANALYSIS CERTAIN PATTERNS OR FORMATIONS, LEVELS OR AREAS, APPEAR ON THE CHARTS THAT HAVE A MEANING IN TERMS OF PROBABLE FUTURE TREND DEVELOPMENT. THEY ARE NOT INFALLIBLE, BUT THE ODDS ARE DEFINITELY IN THEIR FAVOR. TIME AFTER TIME, AS EXPERIENCE HAS AMPLY PROVED THESE PATTERNS LEAD TO SUCCESSFUL OUTCOMES.
CUP AND HANDLE THIS PATTERN CONSISTS OF A LARGER CUP OR A SAUCER SHAPED ROUNDING BOTTOM FORMATION FOLLOWED BY A HANDLE LIKE ATTACHMENT. MOST OF THE TIMES IT IS A CONTINUATION PATTERN. I.E IT OCCURS IN THE MIDDLE OF A BULL RUN. A PRECEDING RALLY IS ALWAYS A DESIRED PATTERN. THIS PATTERN INDICATES A TEMPORARY HALT IN A RALLY WHICH PROVIDES AN ENTRY POINT FOR THOSE LEFT BEHIND EARLIER.
CUP AND HANDLE contd VOLUMES DURING A HANDLE FORMATION ARE VERY LOW INDICATING LOW LEVEL OF INTEREST AND MORE OF A TIME CORRECTION. USUALLY IN AN IDEAL PATTERN, THE BOTTOM OF HANDLE SHOULD NOT GO BELOW THE 50% RETRACEMENT LEVEL OF THE CUP PRICE TARGETS ARE ARRIVED AT BY ADDING THE HEIGHT OF CUP TO THE BREAKOUT LEVEL. THESE ARE OFTEN MINIMUM TARGETS AND OFTEN EXCEEDED
FUNDAMENTALS -BBL TRANSFORMER SECTOR IS ON A ROLL GOOD NOS REPORTED FOR MARCH 17 QTR CO HAS INVESTMENT IN SHARES OF SIEMENS HDFC, HOEL ETC AND THESE STOCKS HAVE RUN UP DURING CURRENT BULL RUN.
MONSANTO FUNDAMENTALS GOOD RESULTS REPORTED FOR PAST THREE QUARTERS MNC COMPANY WITH DOMINANT POSITION IN CORN HYBRIDS AND ALLROUND AGROCHEMICAL PRODUCT. GLOBAL MERGER OF BAYER AND MONSANTO.
VST TILLERS FUNDAMENTAL WELL MANAGED COMPANY CO HAS EXPANDED CAPACITY OF TRACTOR MANUFACTURING. TRACTORS ARE THE NEW GROWTH ENGINE. WITH NEW FACILITIES, THE LAND AT WHITEFIELD BANGALORE COULD OFFER OPTIONALITIES. FARM MECHANISATION PICKING UP PACE.
ORIENT REFRACTORIES INDIRECT WAY TO PLAY STEEL CYCLE. WELL MANAGED CO WITH RHI AS PROMOTER. RHI IS A GLOBAL LEADER IN REFRACTORIES. PRODUCTION CAPACITY OF 9300 TONS EXPANDED BY ANOTHER 2400 TONS AT A COST OF 17 CRORES, TO MEET GROWING DEMAND OF REFRACTORIES GLOBALLY.
FLAGS AND PENNANTS THIS IS A PATTERN WHICH AGAIN IS A CONTINUATION PATTERN AND OCCURS MIDWAY DURING A STOCK S BULL RUN. IT AGAIN INDICATES A COUNTERTREND SMALL CORRECTION DURING AN ONGOING BULL RUN. AFTER A SHARP ALMOST VERTICAL RISE, THE STOCK PRICE TENDS TO CONSOLIDATE IN A SLIGHTLY DOWNPOINTING FLAG PATTERN WHERE VOLUMES DRY UP.
FLAGS AND PENNANTS contd HERE, THE BOTTOM OF THE FLAG SHOULD IDEALLY NOT CORRECT MORE THAN 50% RETRACEMENT LEVEL OF PRECEDING RALLY. AND A BREAKOUT PAST THE FLAG PATTERN SHOULD OCCUR WITH HIGHER VOLUMES. PATTERN TARGETS ARE ARRIVED AT BY ADDING THE HEIGHT OF THE FLAGPOLE TO BREAKOUT POINT.
KCP LTD CONGLOMERATE WITH MAIN INTERESTS IN CEMENT, SUGAR, POWER, HEAVY ENGG, TURNKEY SUGAR AND POWER EPC, HOSPITALITY CAPACITY EXPANSION IN CEMENT AT MUKTYALA TO DRIVE CEMENT VOLUMES AROUND 33 MW POWER ASSETS INCLUDING RENEWABLES
DOUBLE BOTTOM ONE OF THE COMMON PATTERNS SEEN DURING BOTTOM FORMATION. TWO BOTTOMS AND AN INTERMEDIATE PEAK ARE IMPORTANT POINTS TO WATCH OUT. BREAKOU T PAST THE INTERMEDIATE PEAK WITH HIGH VOLUMES INDICATES CONFIRMATION OF PATTERN. TARGETS ARE ARRIVED AT BY ADDING HEIGHT OF PATTERN TO BREAKOUT LEVEL.
