This is a reversal trend pattern.  Here the piercing day is on 24-12-15.  The corresponding volume is high.  The body of the red candle covered the high of the previous day.  Also it has covered more than 100%  of the green candle.  The entry price is at Rs 5.90.  This is the lowest price of the green candle on 23-12-15.  The stop loss is the highest of the red candle on 24-12-15 at Rs 6.30.  The risk is between A to B which in money terms is Rs 0.40.  So the target is entry at Rs 5.90 minus the risk of Rs 0.40 which equals to Rs 5.40.  

4 Comments
  1. MOHAN KUMAR R 2 years ago

    Hi Radhakrishna,

    The green candle has fully covered the red candle so I think it can be considered as engulfing. But I doubt whether it is piercing.

  2. Naresh 2 years ago

    Hi,
    Technical analysis can be more difficult to apply to low volume stocks so better you should avoid illiquid stocks.

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