Thursday, December 19, 2013

Trading stocks – DLF using technical analysis!

Trading stocks using technical analysis in a systematic way.
The below article shows triangle pattern applied along with Elliott wave theory.
Indian Equity market is moving very different compared to other indices of the world. Nifty made lifetime high of 6415, however, it failed to sustain at higher levels and moved lower constantly. In this subdued movement, a few sectors and individual stocks have been moving more independently.
To understand more about individual stock movement we picked up the DLF from the equity report- The Financial Waves STU which clearly shows that prices had done nothing in last 5 months (August to November 2013) but consolidated sideways between 120-175 levels. It seems that it has formed triangle pattern and currently it is in the last leg of the pattern as per advanced technical tool i.e. Elliott wave theory.
Triangles are probably the most difficult pattern to trade because prices simply trade sideways during this period.
DLF 120 mins chart:
Waves Analysis:
Below write up is of the previous day equity report
DLF one of the stocks from the Realty index which is trading in the range from last 5 months. Day by day, the range is becoming smaller and breakout on either side will indicate good trend ahead.
Since start of 2013 prices were moving lower in downward sloping channel where it got strong resistance on the upper line of the channel. However, for the first time prices managed to move above the channel and started to move higher…
As per wave perspective, prices are probably moving in the form of complex corrective pattern with triangle as the last part of correction. A move above … is important to validate this count.  However, if it does not happen, then it will indicate that intermediate wave …of complex correction is still ongoing.
Same as triangle pattern, there are many continuation and reversal patterns in technical analysis which works very well on stocks, commodities, currency and index.
The question arise that will it be able to break the pattern and resistance level OR it will move lower again? To know the answer subscribe our daily equity report –The Financial Waves STUwhich also covers comprehensive research on Nifty and 3 stocks on rotational basis. For more information visit to us at or Contact us

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