Analysis by : CA Rajiv D Khatlawala
(Author: "How to profit from technical analysis- a beginner's guide" published by Vision Books www.visionbooksindia.com)
Is SBI giving a 'rounding top' reversal signals ??
Consider the daily Chart of SBI the banking sector leader
SBI has been one of the few stocks which was not heavily affected by the recent turmoil . where many other stocks lost more than half their peak values .
This led me to further evaluate the stock in detail for considering an entry. But the price pattern which emerged made me have second thoughts
1. If you observe the chart there is a clear rounding pattern emerging. The pattern which started mid Oct 2007 made higher highs in the Nov-Dec rally but the newer highs were not significant as is usually the case with rounding tops... Thereafter it made a lower high which strengthens the pattern further.
2. You will also observe that the volumes have been falling as prices were rising.
3. Usually, a typicality of the pattern is that pries tend to move towards the 'starting point' of the rounding pattern (see marking on the chart).
(Readers may further read in detail about the rounding pattern in my book "How to profit from technical analysis - a beginner's guide" )
4. The rounding pattern will now be negated only if prices break the resistance level of Rs 2450/-
Readers may want to track the stock based on this analysis ( or further analysis of their own)
Your feedback is welcome
CA Rajiv D Khatlawala
3 comments:
nice effort sir..it shows a lot of concentration and dedication...Keep it up and keep it going
Saurabh
Great call Rajiv ! Today the price moved to 1613, very close to your original target.
Does the 1600 target mean that short positions should be closed at this price level or that one should get long again at this price ?
Thanks
Sudeep
Sudeep
You may close the short sell position as target is reached ... But don't go long yet ...
Thanks
CA Rajiv D Khatlawala
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