Technical Analysis:
Understanding Descending Triangle Breakouts:
Key Factors to Consider for a Bullish Breakout:
Target of ₹1500:
- Current Price: ₹885
- Stop Loss: A closing basis stop loss at ₹785 provides a defined risk level.
- Target: Your target of ₹1500 suggests a significant potential upside.
- Descending Triangle Breakout: A breakout from a descending triangle is typically considered a bearish signal, indicating a potential continuation of a downtrend. However, in some cases, a breakout in the opposite direction (above the upper trendline) can occur, which would be considered bullish. It's crucial to confirm the direction of the breakout you are observing.
- Time Frame: A 3 to 6-month timeframe is reasonable for a pattern like this to play out.
Understanding Descending Triangle Breakouts:
- Typical (Bearish) Scenario: In a typical descending triangle, the price makes lower highs while the lows remain around a horizontal support level. The breakout usually happens below this support, indicating further downside.
- Atypical (Bullish) Scenario: If the price breaks decisively above the descending upper trendline of the triangle, it can signal a bullish reversal or a strong upward move, negating the typical bearish implication. This is what you seem to be anticipating.
Key Factors to Consider for a Bullish Breakout:
- Breakout Confirmation: For a bullish scenario, the price needs to break clearly above the upper descending trendline of the triangle with strong volume.
- Sustainability: The price should sustain above the breakout level and not fall back into the pattern.
- Market Context: The overall market sentiment and the performance of the pharmaceutical/healthcare sector can influence MEDPLUS's price action.
- Company Fundamentals: While you haven't mentioned fundamental analysis, it's always wise to consider the company's financial health and future prospects alongside technical patterns. Recent positive financial results for MEDPLUS could support a bullish move.
Target of ₹1500:
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.