Company Selected : Bajaj Finance Ltd.,
Type of Chart : Candlestick type
Illustration : Double Bottom Pattern of stock movement.
The Chart displays formation Double Bottom with time interval of more 30 days and also volume surge witnessed while moving ahead of previous top. This price behaviour concurs with Dow’s Theory of Demand & Supply.
It is observed that at both the bottom tips are formed with heavy volume of selling indicating lack of Buyers at Demand zone. Subsequently, Buyers slowly gain control and move forward consistently over a period of time. While moving ahead of previous bottom, high volume being witnessed and, in such cases, according to Dow’s theory, the trend likely to continue in the same direction which may be seen in the chart.