Chart of the Day! - 6th December 2022

 CHART OF THE DAY

• In this series I will share my personal favorite breakout chart. The one which fits my setup the most & I like.

• A little disclaimer in the start - Just because I like anything doesn't mean you should go & buy it. I might be completely wrong in this. My intention here is just to let you know my personal high conviction pic. I'm a human & I also make mistakes. Always follow risk management & please consult your financial advisor before arriving at any decision. All this is for educational purposes only & my goal is to make you an independent trader. So, if you're buying or selling anything just because I'm posting about it, you are completely defying my intention of creating all this. So please refrain from doing the same. Thank you!

So, below is today's CHART OF THE DAY :-

Chart of the day

But.... where is the name?

Well, its hidden, you will know the name AFTER you read this blog (Learn & then earn)!

What's bullish in this chart?

• Good question. Lets first observe the chart & decode what's happening inside. So first of all the stock rallies like crazy (We all know the reason, Adani takeover ;) Then, after making a temporary high, it goes down, comes up making a rounding bottom, rejects near the temporary high again, makes another bottom, comes up again & is now trading in a very tight range just below that temporary high.

But why is this pattern bullish?

• Another good question. First of all lets talk about the pattern, the first dip was around 20%, the second dip was just 5% & the third consolidation is just below the resistance making a kind of little flag pattern as well. This shows the domination of buyers & it even gets better because from the past 4 days they have been just sitting at the door of sellers waiting for a breakout.

• Whenever the candles stick to a trendline or a support/resistance zone, it means that a move in that direction is coming very soon. It tell the authority of bull/bears that they are just sitting at the verge of breaking it & once the supply is over or becomes less, the overwhelming demand makes the stock price look like a rocket!

Okay, is there anything else?

• Hell yes! Just have a look at those volumes. They are dying to tell to you what's cooking inside. 

• When the stock was going up after Adani's takeover it had massive increasing volumes. Those big green bars signifying amazing momentum. Since it has made its temporary high the volumes have dropped so much! This shows that the supply is becoming lesser & lesser. When less supply is put with narrow range of prices, the demand takes over & drives the prices crazy high. 

• One thing to remember, its a buy before breakout setup, don't buy it blindly. If you would see, there is a market level at a temporary high (the yellow line). That is a pivot point & in theory, VCPs are recommended to be bought only after they breaks that level & sustain for a while. THIS IS NOT A BUY/SELL RECOMMENDATION (PLEASE READ THE DISCLAIMER AT THE TOP AGAIN).

So, These are the reasons why I am bullish on this particular chart. Do you have any other input? Fell free to share with us in the comments below!

So now, finally, its time to reveal you the chart with company name. 

*Drum rolls*

*Some more Drum rolls*

Ambuja Cement

THANKS FOR READING!

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