How to catch Momentum using Ichimoku cloud and price patternAug 23, 2023
It is possible to capture good moves in stocks using price patterns along with simple indicators like Ichimoku cloud. See how we identified such move in WELSPUNIND.
Ichimoku cloud - The Ichimoku Cloud is a technical tool that indicate the support and resistance, identifies trend direction, gauges momentum and provides trading signals.
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WELSPUNIND Daily chart as on 01st August 2023
Wave analysis as published on 01st August 2023
Welspun India closed with a massive gain of 9.32% after the company’s total income grew 11.9%. On the daily timeframe, as we can see in the chart from the past three months prices was consolidating in a Triangle pattern. Due to sharp move prices gave a close above the 104 levels which confirms breakout of the said pattern and sudden rise in volumes acted as a double confirmation. On the other hand, base line (red) has acted as a support and every time stock has bounced back on the upside by taking support of the same. So, as per this nearest support is at 100 levels.
On the hourly chart, we have applied parabolic SAR which used to determine the price direction as well as draw attention to when the price direction is changing. A single Parabolic SAR have formed below the price which suggest that short term bias might turned bullish but more price action is required to confirm the same.
Trend for Welspun India looks bullish. Any dip towards 105 can be used as a buying opportunity for a move towards 122 as long as 100 holds on the downside.
Happened as on 23rd August 2023
As we expected stock after a dip witnessed a good rally of more than 19% within less than a month. Stock achieved our target of 122 and made high of 125.4 after giving breakout of the Ascending Triangle pattern. In such choppy market we have managed to identify such stock with the help of simple chart pattern. If we combine simple price action with price patterns then it together works like magic!!
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