Surya Roshni - Low Price Mid Cap Stock

Surya Roshni - Low Price Mid Cap Stock

Surya Roshni has been forming a Double Bottom Pattern (see attached chart).

What is a Double Bottom
The double bottom is a major reversal pattern that forms after an extended downtrend. As its name implies, the pattern is made up of two consecutive troughs that are roughly equal, with a moderate peak in between.

Although there can be variations, the classic double bottom usually marks an intermediate or long-term change in trend.

The double bottom looks like the letter "W." The twice touched low is considered a support level.

To help clarify, we will look at the key points in the formation and then walk through an example.

Prior Trend: With any reversal pattern, there must be an existing trend to reverse. In the case of the double bottom, a significant downtrend of several months should be in place.

First Trough: The first trough should mark the lowest point of the current trend. As such, the first trough is fairly normal in appearance and the downtrend remains firmly in place.

Peak: After the first trough, an advance takes place that typically ranges from 10 to 20%. Volume on the advance from the first trough is usually inconsequential, but an increase could signal early accumulation. The high of the peak is sometimes rounded or drawn out a bit from the hesitation to go back down. This hesitation indicates that demand is increasing, but still not strong enough for a breakout.

Second trough: The decline off the reaction high usually occurs with low volume and meets support from the previous low. Support from the previous low should be expected. Even after establishing support, only the possibility of a double bottom exists, it still needs to be confirmed. The time period between troughs can vary from a few weeks to many months, with the norm being 1-3 months. While exact troughs are preferable, there is some room to maneuver and usually a trough within 3% of the previous is considered valid.

Advance from trough: Volume is more important for the double bottom than the double top. There should clear evidence that volume and buying pressure are accelerating during the advance off of the second trough. An accelerated ascent, perhaps marked with a gap or two, also indicates a potential change in sentiment.

Resistance break: Even after trading up to resistance, the double top and trend reversal are still not complete. Breaking resistance from the highest point between the troughs completes the double bottom. This too should occur with an increase in volume and/or an accelerated ascent.

Resistance turned support: Broken resistance becomes potential support and there is sometimes a test of this newfound support level with the first correction. Such a test can offer a second chance to close a short position or initiate a long.

Price Target: The distance from the resistance breakout to trough lows can be added on top of the resistance break to estimate a target. This would imply that the bigger the formation is, the larger the potential advance.

According to the attached chart, the double bottom was made at Rs. 13.00.

The top or resistance level is Rs. 23.00

If the distance between these (23.00-13.00) is added to the top of this pattern we have an upward price target of Rs. Rs. 33.00

You could get more info on this company at their website suryaglobal.com

Attached Images

surya20040727.gif (28.8 KB, 168 views)

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Best Wishes!

Traderji

www.Traderji.com

Surya Roshni is moving up because of its steel pipe division

Any comments??

Thank you Traderji!!

Surya Roshni has broken out of its resistance level of 23.00.

Look out for 30.00 to 33.00

I hope all of you have been following this stock and taken a position in it!!

i have read the chart , and from that chart surya roshini is good buy at this time.because after ex dividend it has not broken 23/- level. so that one can buy this stock with the stop loss of 21/-.
other thing that, it will going for expansion also for rs 200/- mn. and it also pay dividend.

check the chart.

Surya Roshni has closed above Rs.30/-as recommended by traderji. Now what? Where can we sell it and what should be the trailing stoploss.

Hang on to your position with a trailing stoploss.

__________________
Best Wishes!

Traderji

www.Traderji.com