Identifying and trading the Rounding bottom pattern
The above chart is of BEPL (Bhansali Engineering Polymer Ltd), on weekly chart.
The stock made a high of around 218 on Jan 2018, then corrected by almost 30% and again made a new high of 225 in April 2018, where it could not sustain and hold the previous high if 218 on weekly closing basis. After forming a kind of triple top at around 215-225 levels in April 2018, the stock started its downfall. It corrected a whopping 90% from its high of 225 to make a low of 22.75 on March 2020. In between the stock gave some bounce back, where it failed to hold the bounce, where volumes had almost dried up.
On March 2020, stock made a rounding bottom pattern where it made a low of 22.75, and started trading in tandem with the Index, making higher highs and higher lows on weekly chart.The rounding bottom pattern was confirmed, when the stock breached its previous resistance level of 58-60 with good volumes.
After breaching the resistance, again stock re-tested the resistance level of 58 and successfully held that level on weekly closing basis, where it became new support level for the stock for its further upward journey. Also there was some good volumes recorded along with price action during the successful breach of resistance, which gave the confirmation of rounding bottom.
Currently, the stock is trading around 195-197 levels, returning a whopping 750% over a period of 18 months. And is just 14% away from its ATH, which seems quite possible for the stock again to reach its ATH price, which has outstandingly rewarded its investors, who held on with it in patience. As our market guru Mr Buffet says "Market is a tool to transfer money from impatient to patient".
Now, as the stock is on course to move towards its ATH, we will have to wait and watch, if the stock successfully manages to breach the previous high and makes a new ATH. Again, the volumes should be monitored during any successful breach of previous high levels and sustaining above those levels, would further take the stock to new territory.
Hope, this post was helpful in identifying Rounding bottom pattern and getting the confirmation of same.
Also, one should also check the fundamentals of the company, before initiating any trades or considering to trade, as it would help us to know more about the companies current situation and its future prospects.
Happy trading !!
The stock made a high of around 218 on Jan 2018, then corrected by almost 30% and again made a new high of 225 in April 2018, where it could not sustain and hold the previous high if 218 on weekly closing basis. After forming a kind of triple top at around 215-225 levels in April 2018, the stock started its downfall. It corrected a whopping 90% from its high of 225 to make a low of 22.75 on March 2020. In between the stock gave some bounce back, where it failed to hold the bounce, where volumes had almost dried up.
On March 2020, stock made a rounding bottom pattern where it made a low of 22.75, and started trading in tandem with the Index, making higher highs and higher lows on weekly chart.The rounding bottom pattern was confirmed, when the stock breached its previous resistance level of 58-60 with good volumes.
After breaching the resistance, again stock re-tested the resistance level of 58 and successfully held that level on weekly closing basis, where it became new support level for the stock for its further upward journey. Also there was some good volumes recorded along with price action during the successful breach of resistance, which gave the confirmation of rounding bottom.
Currently, the stock is trading around 195-197 levels, returning a whopping 750% over a period of 18 months. And is just 14% away from its ATH, which seems quite possible for the stock again to reach its ATH price, which has outstandingly rewarded its investors, who held on with it in patience. As our market guru Mr Buffet says "Market is a tool to transfer money from impatient to patient".
Now, as the stock is on course to move towards its ATH, we will have to wait and watch, if the stock successfully manages to breach the previous high and makes a new ATH. Again, the volumes should be monitored during any successful breach of previous high levels and sustaining above those levels, would further take the stock to new territory.
Hope, this post was helpful in identifying Rounding bottom pattern and getting the confirmation of same.
Also, one should also check the fundamentals of the company, before initiating any trades or considering to trade, as it would help us to know more about the companies current situation and its future prospects.
Happy trading !!
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