Here’s how the Eros Media Chart looks on first instance
A rising tide lifts all boats, even the leaking ones. There is nothing exciting. Few months back – Eros was trading at life time low. Thanks to revival in market sentiment, Eros has also rallied from lows of 110 back to 170. But that does not change the fact: Eros Media Chart is a leaking boat. The stock from highs of 270 in October 2011 made a dramatic collapse to 110 in August 2013. In these last 2 years: stock has formed a significant resistance at 230 AND as of now – below 230: stock can do anything and it all depends on broader market sentiment. It can rally to 230 or it can collapse to 110.
Having a second Opinion on the Chart: How about plotting a Trendline Resistance
This chart makes the near term picture exciting. The stock price appears well set at trendline resistance and any bullish move above the trendline will set the stock up for rally to 230. Now looking at this chart: one can form a trading strategy of Going Long post breakout above Trendline resistance with adequate stop loss and target of 230.
There is a saying: Every chart tells you a story. The best investment stories are the obvious ones but if have to trade, you need to keep looking for any new evolving patterns. This trading idea has yet to take shape i.e. breakout.
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