How to trade Maruti for week starting 30/05/2016

Bullish Possibility: 

In our earlier post on Maruti, we mentioned:

For the last couple of weeks Maruti has put on couple of doji signals on weekly chart. Doji signals indicated indecisiveness between bulls and bears and also some times indicate formation of tops. But the good thing is that Maruti still floating above 3800. So till this is trading above 3800 bulls are safe and look for first target at 4177 and next 4340 approx.

Now let's analyze where we are in this counter. Last week Maruti opened at 3964, made low at 3893, high at 4162 and closed at 4146.6. So we are almost near our first target of 4177.

Maruti Daily Chart

As can be seen from the above daily chart of Maruti we are almost near to the top of the rising trend channel line and 61.8% Fibonacci retracement of the last fall. Hence resistance is expected at this area and some minor correction can be started but we should be resuming the trend as long we are within the rising trend channel. The next target is at 4340 approx which is the target of the Inverse Head and Shoulder as marked on the chart.

Bearish Possibility: 

As a trader we should always be ready with our stops and reversal levels. Hence traders should hold on to their long positions with stops moving to entry point i.e 3800 level and should use this as SAR for short entry. 

Summary:   

1) Maruti has resumed it's primary long term trend which is long. 

2) Traders should hold on long with SAR at entry point i.e 3800 as this is a medium term trade hence no aggressiveness.

Final Words: 

If you like this post do share it and leave your comment. Any question related to the topic? Feel free to ask.

Trade safe and keep checking this space for any further updates on developing resistances in between. Also check out our other publications on Nifty, Bank-nifty and other stock specific at the left hand column. You can also visit my masters (Ilango) blog for daily updates on Nifty. Happy Trading. As my mater says, Get Rich Slowly and Quietly. Cheers!!