As per weekly and daily chart, ABB has formed a double-bottom, which is one of the most tracked patterns by technical analysts community. The reason for stock making news is because Q3 profit has increased by 54%. Fundamentally, the stock is trading 3 times the Price to Earning (PE) of industry average PE. The double bottom formation has resulted in fresh buying as well as short covering. It is interesting to note that, in the recent weeks, the rise in stock price has been used for profit booking/shorting the stock. Today’s stock close price is also indicating similar phenomena as shown in charts.
However, the surge in volume may create the dilemma in technical analysts on whether to go short or to buy. It would be better to wait till clarity emerges in the chart. My suggestion would be to wait for synchronization between price and volume in the next few days. Play your cards on successful breakout confirmation. If the volume is thin, there would be a higher probability of breakout failure, which will give low risk shorting opportunity.
Note: Information presented in the above article is available in public domain and it should not be treated as “Research Report”
Information presented in the above article is available in public domain and it should not be treated as “Research Report”
Registration Status: I am not a SEBI registered Research Analyst.
As per SEBI (RESEARCH ANALYSTS) REGULATIONS, 2014 and clarifications provided by SEBI “Any person who makes
“Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations.”
Disclaimer: I do not hold any position in ABB.