Trading Idea: NSE:WIPRO forming inverse (bullish) H&S

wipro bullish h&s 2023

I haven’t posted any charts in a while but today I saw this chart and couldn’t stop myself from sharing it since it looks nearly textbook. H&S (head and shoulder) is essentially a reversal pattern where the prevailing trends reverses after formation of it.

In this case, WIPRO has been in downtrend since nearly 2 years now as you can see in the attached daily chart. From around September last year, it has been trying to go up but had encountered resistance consistently four times which formed the H&S neckline. On 5th attempt in last month, it broke out with double the average volumes but the move didn’t sustain and it slipped below the neckline. Today it has again closed above the neckline and with it, the stock seem to have completed the pullback (almost 61.8%) after breaking out last month.

This looks like a good bullish setup with great risk to reward ratio considering we are above neckline (408.85) and this swing low could be the SL (below 396.55) for a target around 470 as per the height of head. Having said that, if this H&S plays out then it could be a longer term play as well since this reversal could last for sometime considering the stock has been in a bear market for nearly 2 years now.

Disclaimer: Purpose of this post is to educate on technical analysis methodologies and not giving trading/investing advice.

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