Inverse Head and Shoulders Pattern - SYNCOMFHey traders,
I wanted to share an interesting swing trading setup I spotted on the SYNCOM FORMU (I) LTD daily chart. The stock has formed a classic inverse head and shoulders pattern, which is a bullish reversal signal. This pattern is characterized by three troughs, with the middle trough (the head) being the lowest and the two outside troughs (the shoulders) being higher and roughly equal in height.
Here's the breakdown:
The left shoulder formed around mid-October.
The head was established in late October.
The right shoulder completed in early November.
The neckline of this pattern is around the 21.57 INR level, which the stock has just broken above, indicating a potential upward move. The target for this pattern is calculated by measuring the distance from the head to the neckline and projecting it upwards from the breakout point. This gives us a target around 24.93 INR.
Volume also supports this breakout, as we can see a significant increase in buying volume during the breakout. This adds more credibility to the bullish move.
For risk management, consider placing a stop loss below the right shoulder, around 20.48 INR. This setup offers a good risk-to-reward ratio, making it an attractive swing trade opportunity.
Happy trading and stay safe!
