Hindustan Unilever is set to fall after this Bearish divergence?
Hey Friends,
Trading Mantra:
“An astute trader aims to enter the market during quiet times and take profits during wild times.” ― Alexander Elder,
According to J. Welles Wilder, the person who developed the Relative Strength Index, When the stock price and the directional momentum does not match each other, is called as Divergence. There are two types of divergence, a Bullish divergence and a Bearish Divergence.
Bullish Divergence occurs when the stock price makes lower low and RSI makes higher low, in other words the RSI resists to make a lower low despite the stock price making a lower low.
Bearish Divergence occurs when the stock price makes higher high and the RSI makes a lower high, in other words the RSI resists to make a higher high despite the stock price hitting the higher highs.
HINDUNILEVER | SELL | Price : 1830-1850 | Stop Loss 1864 | Target 1722, 1674
Observations on the Chart:
The stock made a low of 1478 on 11th Oct 2018 See point V1 low 1478 (blue vertical line) & a high of 1869 on 17th Dec 2018 see point V2 high (red vertical line)
Stock has been inching upwards with the blue trend line, which the stock has breached on friday 21st dec 2018
If we connect the highs of point A & point B we get an upward sloping line AB
if we connect the highs of the RSI at point C & D we get a downward sloping line CD
There is good amount of divergence on the price and the RSI indicator the price was making newer high at point B as compared to point A and the RSI was making lower high at point D as compared to point C
This is hinting towards a BEARISH DIVERGECE and the stock may fall to 1722 & 1674 in coming month.
One can take a short position around 1830 to 1850 with a strict stop loss of 1864
Isn’t it amazing ? ? ?
Billion Dollar Question to ask yourself
Are you finding any such patterns if not how to find them ?
Thank you for sharing….
Happy reading…
Happy Trading…
Be a Wealthy Trader…..
Trading Mantra:
“An astute trader aims to enter the market during quiet times and take profits during wild times.” ― Alexander Elder,
According to J. Welles Wilder, the person who developed the Relative Strength Index, When the stock price and the directional momentum does not match each other, is called as Divergence. There are two types of divergence, a Bullish divergence and a Bearish Divergence.
Bullish Divergence occurs when the stock price makes lower low and RSI makes higher low, in other words the RSI resists to make a lower low despite the stock price making a lower low.
Bearish Divergence occurs when the stock price makes higher high and the RSI makes a lower high, in other words the RSI resists to make a higher high despite the stock price hitting the higher highs.
HINDUNILEVER | SELL | Price : 1830-1850 | Stop Loss 1864 | Target 1722, 1674
Observations on the Chart:
The stock made a low of 1478 on 11th Oct 2018 See point V1 low 1478 (blue vertical line) & a high of 1869 on 17th Dec 2018 see point V2 high (red vertical line)
Stock has been inching upwards with the blue trend line, which the stock has breached on friday 21st dec 2018
If we connect the highs of point A & point B we get an upward sloping line AB
if we connect the highs of the RSI at point C & D we get a downward sloping line CD
There is good amount of divergence on the price and the RSI indicator the price was making newer high at point B as compared to point A and the RSI was making lower high at point D as compared to point C
This is hinting towards a BEARISH DIVERGECE and the stock may fall to 1722 & 1674 in coming month.
One can take a short position around 1830 to 1850 with a strict stop loss of 1864
Isn’t it amazing ? ? ?
Billion Dollar Question to ask yourself
Are you finding any such patterns if not how to find them ?
Thank you for sharing….
Happy reading…
Happy Trading…
Be a Wealthy Trader…..