TechM: Classic Trade Setup Combining Wave theory with Ichimoku Clouds

TechM has been one of the outperformers in the IT sector and has given multi fold returns to its investors over the years but the stock has been consolidating since September 2018.

Below is the chart we published in our monthly report, “The Financial Waves Monthly Update”

TechM daily chart (with Ichimoku Cloud Indicator)

Elliott Wave Analysis: As shown on the weekly chart prices are moving higher in the form of Primary degree wave 5. We can see that price broke outside the rising channel and is consolidating which also indicates that Wave 5 looks to be further subdividing within which intermediate degree wave (ii) is forming an irregular flat correction. The current price action suggests that either the next leg has begun on the upside in the form of wave (iii) which is often the largest wave in an impulse or wave (ii) could be forming a complex corrective pattern

Ichimoku Cloud: Ichimoku cloud indicator is basically an all in one indicator as it helps in identifying support, resistance, trend direction, entry points, measures momentum, etc. If you look at Ichimoku indicator you will find two lines i.e. base line (kinjun-sen) & conversion line (Tenkan-sen), which acts as an important tool for trend identification. We can see that price has managed to sustain very well above the cloud and formed higher high and higher lows which clearly indicates a bullish trend. In a strong uptrend the conversion line is above the base line, but we can see that currently the base line is above the conversion line, indicating a consolidation in price and once we see them resolve again to the upside, one can enter a long position. A long position can be held as far as price does not break below the cloud along with the lagging indicator and forms a sequence of lower highs and lower lows. 

Happened so far– Post recommending the stock prices are moving in line with our expectations and moving precisely within the channel on upside.

To view complete details get access to the monthly research report – The Financial Waves monthly update

Mentorship: I will be covering these important trade setups that is must in your trading plan in the upcoming Mentorship program. I will be assisting in the trades taken beyond the 3 months mentorship schedule as an ongoing learning for any trader. How to enter and exit in disciplined fashion. Know more here