Understanding and capturing the trend of Maruti with the application of basic technical tools like trendlines, RSI!
Over past few days Indian Equity Markets has continued to trade with positive bias within which outperforming stocks have provided the major support to the ongoing rally. Recently Maruti has showed tremendous rally from 7500 to 8150 level till now. This is rise of more than 8.50% in quick time. From technical perspective, to capture such moves one needs to identify the pattern under formation. This also helps to know the risk reward ratio. Based on the same we provided our bullish stand on Maruti in the Equity research report dated 6th September 2017 and part of the same is shown below:
Maruti 60 mins chart: (Anticipated in the morning of 6th September 2017)
Maruti 60 mins chart: (Happened till now)
(Part of research published in the morning of 6th September 2017)
“Maruti has continued to outperform the overall market and this stock is trading at life time highs. One should use buy on dips strategy in such kind of stocks and one should avoid catching the top.
As shown in weekly chart, in the end of 2017 prices broke the upward moving blue channel and since then black channel is playing its role. After the sideways action of last 3 weeks, stock has formed bullish candlestick pattern which suggest resumption of up move. So now as long as prior week’s low of 7500 is intact on downside, bias will remain positive.
As shown in 60 mins chart, prices have been moving in Expanding pattern. After the sharp rise prices are consolidating above the 50 periods EMA which is positive sign. On downside 7700 is the crucial support.
In short, Maruti trend remains positive. Move above 7875 will open up positive possibilities towards 8050 or higher levels.”
Happened: As expected post breaking above 7875 level, Maruti did not look back and has achieved our mentioned target level. Such kind of trending moves one can capture with the help of technical patterns and trailing stop method plays crucial role to capitalize the trend as long as it goes!
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