CESC - falling wedge

2024년 7월 4일

A falling wedge pattern is a technical analysis chart pattern that typically signals a potential reversal or continuation of the current trend. In the context of CESC (Calcutta Electric Supply Corporation), here’s how you can understand and identify a falling wedge pattern:

Characteristics of a Falling Wedge
1. **Shape**: The pattern is shaped like a wedge that is sloping downward. It is formed by two converging trendlines – a downward sloping resistance line and a downward sloping support line.
2. **Volume**: Volume tends to decrease as the pattern progresses and the price converges between the two trendlines.
3. **Trend**: The falling wedge can appear in both uptrends and downtrends. When it appears in an uptrend, it is considered a continuation pattern. When it appears in a downtrend, it is considered a reversal pattern.

Identification of a Falling Wedge
1. **Downward Sloping Trendlines**: Draw two trendlines – one connecting the highs and one connecting the lows of the price action. These lines should converge, forming the wedge.
2. **Contraction**: The price range contracts over time as the price moves between the two trendlines.
3. **Volume**: Look for decreasing volume as the pattern develops, indicating less selling pressure.
4. **Breakout**: The pattern is confirmed when the price breaks out above the upper trendline (resistance line) with an increase in volume.

Interpretation and Trading
1. **Reversal Pattern (Downtrend)**: If the falling wedge forms during a downtrend, it signals a potential reversal to the upside. Traders often look for a breakout above the upper trendline as a buy signal.
2. **Continuation Pattern (Uptrend)**: If the falling wedge forms during an uptrend, it suggests a continuation of the uptrend. Again, a breakout above the upper trendline is a bullish signal.

Example of Trading a Falling Wedge in CESC
1. **Identify the Pattern**: Look for the falling wedge formation on the CESC stock chart. Ensure the trendlines are converging and the volume is decreasing.
2. **Wait for Breakout**: Monitor the stock for a breakout above the resistance trendline.
3. **Confirm with Volume**: Ensure that the breakout is accompanied by an increase in volume for confirmation.
4. **Enter Trade**: Consider entering a long position once the breakout is confirmed.
5. **Set Targets and Stop Loss**: Place a stop loss below the recent low within the wedge, and set profit targets based on key resistance levels or a measured move equal to the height of the wedge.

2024년 7월 6일

액티브 트레이드

Superb BO in CESC as identified. Holding full quantity

2024년 7월 11일

거래청산: 타겟 닿음

Both targets done comfortably. Idea closed