Some Good Steals...

Originally Posted by AMITBE

Two technical analysis terms that come up often are Double Top and Double Bottom.
I am making some notes here on the dynamics of these, to widen our understanding of a most vital and recurrent theme that appears in almost all charts I have come across. An understanding of these would help in determining a crucially decisive phase in the long or short term trend in the progress of price movement of a scrip.
The Double Top and Double Bottom formations are invariably the true harbingers of an oncoming trend reversal. They are the fulcrum points where an extended up or down trend, or even a short term up or down trend, is about to turn direction.

The Double Top pattern as the term implies, is the formation of two successive peaks that are roughly equal in height, with a mild valley in between. There may be variations, but the typical Double Top marks either a short term or long term change, in the movement of a trend from bullish to bearish.
Assuming the existence of a long or short up-trend, the first peak would mark the highest point of the trend. As such, the peak in itself is a normal occurrence and there is no threat to the up-trend as yet.
At the culmination of the first peak, a decline takes place that would usually drop to a point about 20% from where the peak had started building up. The decline or increase in volume during this pullback has no real significance. The bottom of this decline is normally extended sideway slightly, to give a ‘u’ shape to the trough being created.
Here begins the second climb and will normally occur with low volume. It then tests the level of the previous peak. At the confirmation of any resistance here, the possibility of a Double Top arises. This pattern now awaits further confirmation, as this resistance may well be just a resistance in the ongoing up trend.
The gap between the peaks may vary, depending on if it’s a long trend or a short one. It can be a few days, weeks, or months. Another norm with the twin peaks is the exactness in their heights. A slight variance is allowed usually.
The second decline coming off the second peak would be on increased volume, and increased velocity. This indicates that the supply far exceeds demand. Also, a fresh lot of short traders are attracted here, and the price begins to slip steeply. The level at the bottom, where the first peak/climb had begun, is now the crucial support point, and moving down towards it, the Double Top yet remains unconfirmed. Once this support is tested and convincingly violated, the pattern is complete. To extend this further, the newly broken support level would act as a resistance to any attempted upside again, and would normally not get breached as the demand is poor. Here is another opportunity to trade a short. With declining demand and increased supply, the price begins to spin downwards. More supports are broken, and now a bearish down trend is fully in place. The trend reversal has come to pass.
There could be false Double Tops too. The trend is always in force until proven otherwise. Until the key support is broken in a convincing manner with expanded volume, the up trend will remain intact.

A Double Bottom, the formation of which signifies a trend reversal from bearish to bullish, is in terms of its dynamics, an exact inversion of a Double Top.
I’m sure the explanation above of the Double Top is clear to understand, in order to conceptualise the workings of a Double Bottom.
Should any member feel interested in a similar explanation of the Double Bottom for clarity, I’d be happy to do it.
So much for now.

Originally Posted by AMITBE

Hi Gaurav..you'd agree with me that it's not really possible to arrive at a target for a scrip that has been fuelled by news mainly...at least I'm finding it difficult. This kind of a move would skew the data over a longish period of time. On it's own without the hype, I wonder if the fundaments would really hold up to the current price, regardless of PE ratios etc or future growth prospects. Again, I'm not sure of the formula you have described above. Support immediately is at 200-206. Wonder where you entered, but if from some lower level, I'd suggest exit for now.
Mcleod still looks good to me. The volumes are good and trading range tight. Despite the volatility today, this stood solid and hardly took a dip. A further upside may come soon, but keep s/l tight at 81 to take home the profit should there be selling pressure.
Regards.

Originally Posted by saint

Hi Narendra,
Am not sure if you are taking this on along term or a short term basis.If I had bought this at 19.5as a short term play then it pulled back to 20.20 and then took out its previous high.....I would have raised my stop loss to 20.0.Then it makes a lower pivot high,and I am in caution zone.....waiting n watching,am still in the trade unless stopped.My stop therefore remains at 20.If taken out tomorrow,I am out.

On the other hand,if I were in this on a longer term basis,my stop would have been 13.4,trail stopping upwards would have led to stop loss now being at 17.4........

So on alonger term basis,I 'd hold unless stopped.

Saint

Originally Posted by AMITBE

Hi Narendra...It's in some key support zone tonight at 20 off, and past this 18.50 is exit time. I couldn't say whether it'll turn north again and when, but 18.50 may give a bounce as that is last support for further down. This is in the charts. I wonder if you are aware that the highest point here is 27 off registered in December last. I remember seeing this in the forum, being called as a trading counter some time ago.
If I may say so, as an investor you should be looking into the fundamentals of the companies you are putting money in, whether Usha Martin, or Bharti or whatever. Once convinced and assured, invest, sit back, and let the market forces prevail. The good performance, growth, valuations etc. will certainly be reflected in the price action and your profits too. You'll simply psych yourself out chasing the daily price movement.
Saint is likely to see queries addressed to him sooner at his thread than here.
Thanks.

Originally Posted by saint

Great stuff,my friend.......very nice!Keep em coming and coming and coming!!

Saint

Originally Posted by garun1979

hi Amitbe, Thanks a lot for your views, meanwhile IFSL has broken out of the level suggested by you (35)...its trading at 35.95 thanks gaurav

Originally Posted by AMITBE

Since some members had taken position in VdoconIntl at 81 where it was clled, keep a protective s/l at 98. Could be taken lower if slips from here.

Originally Posted by roneeth

Hello Amit!
Nice moves in Mcleod Russel India Ltd cmp 90.....What is the expected Target?
Regards Roneeth