ABB Up 10%, Rounding Bottom & Bollinger Bands®

Midcap and Smallcap stocks are in buzz as Nifty continued to move in uncharted territory at lifetime high levels.

During such scenario Stocks like ABB moved very well if one were to use simple patterns and Bollinger Bands. Read below to see what made us bullish on this stock just before the breakout happened:

ABB 60 minutes chart: Anticipated

ABB 60 minutes chart: Happened

Wave analysis: Following was published on 31st May 2021 in morning daily research report – The Financial Waves Short Term update

Anticipated - On the daily chart (shown in actual research), we can see that prices have formed ‘Rounding bottom pattern’. The said patterns significance is more when it forms after a downtrend. Here prices are already in uptrend, nevertheless this definitely indicates towards continuation of bullish trend. A close above 1635 level will confirm breakout from this pattern and then uptrend can continue towards …. which is the target of the said pattern. On the hourly chart, we have shown the Bollinger Bands wherein we can see that stock is taking support of the middle bands and has continued to rally. The momentum on upside remains strong and hence any dips towards ……. area should be used as an entry point for creating long positions. In short, trend for ABB remains positive. Buy near ………. zone with 1485 as support and then move towards …….. can be expected.

Happened: ABB moved precisely as expected and the stock rallied by 10% on the same day. This clearly shows that by identifying certain patterns and using simple tools like Bollinger Bands one can still ride the trend in Cash stocks.

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