Broadening Wedge Formation in Apollo Hospitals (NSE: APOLLOHOSP) Implications of the Pattern:
Market Psychology:
The expanding triangle reflects growing uncertainty and volatility, often seen during periods of fundamental shifts or major market news.
Breakout Potential:
The pattern typically resolves in the direction of the prevailing trend (upward in this case, given the stock's long-term ascending channel).
Current Scenario:
The stock is currently near the lower boundary of the triangle, aligning with the long-term ascending channel support. This creates a dual-support zone, increasing the probability of a bounce.
RSI in Oversold Zone:
Oversold conditions combined with a strong support zone suggest a likely reversal.
Trading Strategy
Entry Point:
Enter near the current support zone (above ₹6,750).
Ensure the stock holds above ₹6,600 to confirm the support remains intact.
Target Levels:
Target 1: ₹7,400 (mid-point of the expanding triangle and previous resistance).
Target 2: ₹7,777 (upper boundary of the channel and triangle).
Stop Loss:
Place a stop loss below ₹6,600 to protect against a breakdown.
Breakout Strategy:
If the stock breaks out of the upper boundary of the expanding triangle with high volume, it could accelerate toward ₹8,000+ levels.
