Day 15A Module – Spot Bullish Triangle Pattern

Trade plan:
Triangle pattern is one of the strongest patterns to identify trend consolidation. It is characterized by a contraction in price range and converging trend-lines giving it a triangular shape.
Prior trend is bullish.
Conditions:
• Pattern formed in 60 days (Takes minimum 45 days to form)
• Spotted the 5 wave (A-B-C-D-E) structure where A is the bottom, B is the next top, C is the next bottom slightly higher than A and D is the next top that is slightly lower than B. This indicates that both buyers and sellers are active.
• Both top and bottoms trend-lines converging at E forms a triangle.
• Volume is high while giving breakout
• Upward breakout can be seen and hence long position created with risk reward ratio of 1:1 (One can wait for closing above break out point or closing below break down point for 2 days, to enter in strong trend, and stay away from fake breakout).
o Entry price: Rs 25120
o Stop loss: Rs 24176
o Target price: Rs 26044
• Note: The risk-reward here could always be much better than 1:1 as the stop loss can be based on the smallest portion of the triangle whereas profit booking point can be equal to the largest height of the triangle.