In yesterday's post, I had pointed out that 3 lines of support are merging on the TVS Motors stock price chart on NSE, and it would be important which of these lines the price breaks and which one it respects.
Interestingly (or not so interestingly), the intraday low fell below all 3 support lines (2 trend lines, 1 50 day moving average). But it climbed back and closed above all 3 lines of support. This makes the next day more interesting to watch before taking a position.
There is a line of support to the TVS Motors stock price on NSE at Rs. 70. This was a level where the price found some resistance before it gapped up and created this line into support in mid-Aug 2010. We can see that this line of support has indeed been quite "supportive" to the price.
This will be a line to watch out for at Rs. 70 price level. If this line is crossed with good volume and followed by negative candles, the market might not rise up soon. But if this line is respected, the price will go up again.
The stock price has formed a Reverse head and shoulders pattern. The price today has fallen below the reverse shoulder, which is not a good sign. Other indicators also point towards a decline.
The price could fall further on Monday, obstacled by 2 diagonal support trend lines, the 50 day moving average, and the Rs. 70 support line.
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