How Double Bottoms can make you handsome gains

The several decade old trading tool is worth using today as well and it can also make you a 6 figure income in short term.

Case Study : GlenMark Pharma | Reco : Buy | Rate : 525 | SL 510 | Target: 555, 595

The Mettle of the Experienced Traders is put to test when the stock or index trades at major support or resistance. Where the eminent up move or down move cant be predicted because of lack of volatility, action, liquidity and any other element for that matter.

If the decade old trading pattern if understood and applied with proper risk management handful gains can be made in short period of time.

Double Tops & Double Bottoms

Here is our View on one of the Potential Stock which can return you a 6 figure profits.

Double Tops & Double Bottoms

Double Top : In double tops the stock tends to test the earlier resistance and unable to move any further higher from the earlier top. It is generally formed few days or weeks after the previous peak or top was formed. The stock tend to fall subsequently after such formation. A classic Double top formation happens at exact level of earlier peak.

There can be U shaped Down fall or a V shape down fall after the double top formation. In U shape formation the correction happens slowly as compared to the V shape down fall, which is very sharp and fast.

Double Bottom : The double bottom are more convincing than the double tops. In double bottoms the stocks are testing their earlier supports. In double bottoms the earlier low is not breached and every time the price goes around or lower of the earlier bottom a quick price reversal happens. The Stock price gains momentum ones the traders or investors get convinced with the fall is over. It generally happens over a period of few trading sessions. Because the smart money has already started coming in the stock at bargain rate.

This is a lucrative chart formation which can give 8-10% return in short time.

Case Study : GlenMark Pharma | Reco : Buy | Rate : 525 | SL 510 | Target: 555, 595

Observation :
1. The Chart 1 is the weekly chart of the stock. Horizontal line H2W shows earlier low @ point 1 around 531 was made and the stock retested it in the month of Dec 2017 @ point 3. From where it has also seen an up move of 22% approx and rose up to 647 till point 4.

2. The chart 2 is a daily chart of the stock. from point A to point B the rally was 22% approx. and now at point C it is forming a double bottom pattern. It can not be called as classic double bottom pattern as the current low at point C is marginally lower than point A. The stock may take a minor resistance around 549 shown by Horizontal line H3D. which is also a earlier minor resistance.

Once it surpasses this 550 convincingly the stock may zoom up to 597 which is 61.8% retracement level of the range 517 & 647.

3 Questions to ask yourself ?

  •  Have you ever found this study convincing ?
  •  If yes how it has helped you in making money ?
  •  What needs to hold on to such positions once spotted at right time ?

Trading Mantra

“The Goal Of A Successful Trader Is To Make The Best Trades, The Money Is Secondary.”

  Alexander Elder

2018-04-03T07:20:13+00:00