Infosys: good times ahead

All time high of Infosys till now is 1280, registered on June, 2016. The high occurred during formation of a reliable bearish reversal pattern namely 'Head & Shoulder'. Price moved southwards following a disappointing quarterly result from this software major. That was an excellent trading opportunity and we shared our bearish view in this blog by the articles Infosys.....downward journey and Converting analysis into a profitable trade. 

Infosys enjoyed a 8.36% weightage in nifty at that point of time, that has reduced substantially to 6.16% now. We have another reliable reversal formation in Infosys. This time it is bullish reversal and commonly known as 'Double bottom'. Mr. Thomas N. Bulkowski has referred this type of double bottom as 'Eve & Eve bottom'. And what he mentions as 'Surprise Findings'  per his surprise findings,  is that this pattern performs best breakout is near the yearly low. He also finds that heavier volume on right bottom do well. Interested readers may please go through his book 'Encyclopedia of Chart Patterns, 2nd Edition' for further details.

The discussed pattern of Infosys satisfies these two conditions and thus enhance the risk reward ratio for the traders who intends to initiate trade in Infosys based on this pattern. As per theory confirmation will come when price closes above the highest high between the two bottoms. This is the breakout level.

Breakout level for the ongoing double bottom formation of Infosys is at 1040. Today at 17.03.2017, the stock closed at the same level. 200 DMA, a moving average that carries tremendous significance to the chartist, is at 1042. Confluence of these two technical evidences may make a chartist overwhelmed but trading is much tougher job. Strategy formation and initial trade setup deserve a lot of thinking and beyond the scope of this article.  

The chart is given below. However, the pattern suggests a price objective of 1179. 

Disclaimer - The views here expressed and the charts shared are strictly for educational purpose and not guideline for buy or sell. The author will not be responsible for any loss, that may occur. 

BHEL: Uptrend emerging

BHEL is in a steady downtrend since 2010 and that is easily visible in monthly charts. From 2010 high of 538, it came down to 100 in 2013. Then it made a high of 300 in 2013. Bears again stepped in and price plummeted to 90 in February, 2016. 

Price thereafter went to 163 followed by a fall till 116, that happened in December 2016. Today on 15th March, 2017, price crossed earlier high of 163 and thus creating a 1-2-3 pattern in weekly chart. Please take a look at the chart for ready reference.

This is supposed to be establishment of an uptrend. Higher top and higher bottom is place. As long as price is maintained above 163, BHEL is expected to touch 200 DMA, which is somewhere around 183. Next hurdle is at 220. 

Whatever may be the case, current technical scenario of BHEL is favouring the bulls.

One of the Navarantna trying to make a comeback

Disclaimer - The views here expressed and the charts shared are strictly for educational purpose and not a guideline for buy or sell. The author will not be responsible for any loss, that may occur.