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| BPCL Daily Chart (Chart source: Tradingview) |
BPCL seems to forming a bullish Gartley pattern, as has been highlighted in the chart above. A bullish Gartley pattern is a bullish reversal pattern that is based on various fibonacci ratios and one which marks the end of a price decline.
By definition, the AB leg is approximately 0.618 of the XA leg, the BC leg varies between 0.382 and 0.886 of the AB leg, the CD leg varies between 1.27 and 1.618 of the BC leg, and the AD leg is approximately 0.786 of the XA leg. Point D is the infliction point as it is around this point, where price is expected to find a bottom and potentially reverse to the upside.
By definition, the AB leg is approximately 0.618 of the XA leg, the BC leg varies between 0.382 and 0.886 of the AB leg, the CD leg varies between 1.27 and 1.618 of the BC leg, and the AD leg is approximately 0.786 of the XA leg. Point D is the infliction point as it is around this point, where price is expected to find a bottom and potentially reverse to the upside.
It will be interesting to see how price action pans out near point D. At present, there are no signs of reversal in trend yet, as Friday's bullish candle was negated by today's bearish candle. If the stock shows signs of bottoming out around 470, then a potential reversal in trend can be expected. Also note that the higher bottom in price from point X to point D has been accompanied by a lower bottom in the RSI, indicating that market has gotten oversold at a higher price. This, by definition, is termed positive reversal and is a bullish development.
Based on the aforementioned reasons, if the stock shows signs of bottoming near 470, then a reversal in trend looks likely. Price can be expected to head higher in the days ahead, potentially towards 542-543, which is the confluence point of the previous high as well as the price projection of the positive reversal RSI pattern. On the flip side, break below Point X (449) would invalidate the bullishness of the pattern.
Hello, your charting analysis is very good, could you just tell what will be the time frame of your targets. For all the stocks which you mentioned BPCL, Castrol, Eicher motors, Cipla.
ReplyDeleteHi there, thank you for your words of encouragement. Eicher Motors and Cipla are for short-term, while Castrol and BPCL are for medium-term. While there is no strict definition per se, I would say short-term views are usually for 10 to 30 sessions, while medium-term views are usually for 1 to 6 months
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