Bearish & Bullish Pattern Collision In Reliance Capital Ltd

Daily Chart

Reliance Capital had seen remarkable rally started in may from the levels of 335  and ended in July to the levels 670.

Then a correction took place and stock retraced in about three months more than 61.8% of its previous move from 335 to 670 

It then took Support in between 61.8% - 78.6% retracement of its previous  move from 335 to 670.

It bounced therefrom in the form Ascending Broadening Wedge Pattern (marked by blue dotted ascending supply & demand lines) and had retraced about 50% of its move from 670 to 433.

A breakdown from the ascending broadening Wedge was seen via long long bearish candle, which closed near its low., thereafter stock consolidates there, struggling along with the demand line that turned into supply line after breakout from the said wedge pattern and started falling again.

Four(4)Targets were given by the ascending Broadening wedge pattern( marked by dotted blue horizontal lines) out of them 3 are already met.

Now, the fall which had seen from the ascending Broadening Wedge ,took form of a falling Wedge Pattern(marked by red converging supply & demand lines ) , which is a bullish Pattern that indicates that downward momentum is slowing down and a potential reversal is making its way.

Currently Falling Wedge is made up of :

• The supply/ resistance line is formed with two successively lower peaks.
• The demand/support line is formed with three successive lower lows.
• The apex of the pattern came near 400 levels(potential support) is little away from now, thus we could see further successive lower peaks  & Lower low within it.
• The breakout is usually expected to took place near 2/3 from this pattern , which will then determine , the direction of the stock.