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FINANCIAL CHRONICLE™ » CHRONICLE™ ANALYTICS » DIMO with double bottom ?

DIMO with double bottom ?

5 posters

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1DIMO with double bottom ? Empty DIMO with double bottom ? Sun May 29, 2011 7:24 am

dr kiru005

dr kiru005
Senior Equity Analytic
Senior Equity Analytic

The double bottom is a major reversal STOCK pattern that forms after an extended downtrend.

The pattern is made up of two consecutive troughs that are roughly equal, with a moderate peak in-between.

Double-bottom patterns usually marks an intermediate or long-term change in trend. Until key resistance is broken, a reversal cannot be confirmed.

The following are key points in confirming the double-bottom pattern:

Prior Trend: With any reversal pattern, there must be an existing trend to reverse. In the case of the double-bottom, a significant downtrend of several months should be in place.

First Trough: The first trough should mark the lowest point of the current trend. The first trough is fairly normal in appearance and the downtrend remains firmly in place.

Peak: After the first trough, an advance takes place that typically ranges from 10 to 20%. Volume on the advance from the first trough is usually not important, but an increase could signal early share accumulation.

Second Trough: The decline off the reaction high usually occurs with low volume and meets support from the previous low. Even after establishing support, only the possibility of a double bottom exists, it still needs to be confirmed.

The time period between troughs can vary from a few weeks to many months, with the norm being 1-3 months. While exact troughs are preferable, there is some room to maneuver and usually a trough within 3% of the previous is considered valid.

Advance from Trough: Volume is more important for the double bottom than the double top. There should clear evidence that volume and buying pressure are accelerating during the advance off of the second trough.

Resistance Break: Even after trading up to resistance, the double top and trend reversal are still not complete. Breaking resistance from the highest point between the troughs completes the double bottom. This should occur with a large increase in volume.
The OBV Indicator can be used to confirm the break.

Resistance Turned Support: Broken resistance becomes potential support and there is sometimes a test of this newfound support level with the first correction down. Such a test can offer a second chance to close a short position or initiate a long sale.

Price Target: The distance from the resistance breakout to trough lows can be added on top of the resistance break to estimate a target. This would mean that the bigger the formation is, the larger the potential advance.

what is On Balance Volume - OBV

The on balance volume (OBV) indicator was developed by a fellow named Joseph Granville in 1963.

What makes OBV so useful is that it presents a more visual way to view the share price volume flow and compare it to the stock's price action.

Volume should increase in the direction of the price trend, and this indicator makes it easier to make sure that is happening.

If the direction of the OBV line is up, the line is bullish meaning that there is more volume on up days than on down days.

A falling OBV line signals that volume is heavier on down days, and is considered to be bearish.

[i]what do you guys have to say on dimo ? DB going to go for breaking point or not?[/i]

this is not a buying recommendation and i hold 800dimo @1617/=
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i'm new give me some rep guys. bounce
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2DIMO with double bottom ? Empty Re: DIMO with double bottom ? Sun May 29, 2011 11:32 am

dr kiru005

dr kiru005
Senior Equity Analytic
Senior Equity Analytic

can any experts comment pls Shocked

3DIMO with double bottom ? Empty Re: DIMO with double bottom ? Sun May 29, 2011 12:12 pm

gann

gann
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

@dr kiru005 post TA stuff in the Charts and Graphs section of the forum.
+ from me. The article touches important points in TA. Understanding support and Resistance is a key element in TA.

4DIMO with double bottom ? Empty Re: DIMO with double bottom ? Sun May 29, 2011 1:34 pm

xmart

xmart
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

nice effort bro. + from me.
wrong time to enter. after script dividend and dividend this may down to 1450 level. where were you on 12th May. it was a ideal time to identify the trend and enter.

5DIMO with double bottom ? Empty Re: DIMO with double bottom ? Mon May 30, 2011 11:35 am

dr kiru005

dr kiru005
Senior Equity Analytic
Senior Equity Analytic

@xmart... i think because the share is still under valued the dividend of 20rs and a script dividend worth 30 rs for each share, won't effect the share price after the XD date i think it will drag in all the ppl who waited the share to go down to buy... and the double bottom is developing just in the last two months so even there is time to buy it i actually bought it early i think. real experts are still waiting for it to break the 2nd resistance..

thanks guys i'm starting to love this forum..

6DIMO with double bottom ? Empty Re: DIMO with double bottom ? Mon May 30, 2011 11:49 am

Monster

Monster
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

@dr kiru005. excellent job. keep up your good work. +Rep from me

7DIMO with double bottom ? Empty Re: DIMO with double bottom ? Mon May 30, 2011 6:12 pm

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics

Nice effort .. Why the chart only gives us a time period where DIMO almost shot up from 900 level? What we really need is a chart from January 2011 to now to identify the patterns..

[You must be registered and logged in to see this image.]

Looking at the pattern from April to May in my DFN charts I see it like a cup n handle but no nice cup or handle formation Wink Again this is doubtful as the time period is way too small for a formation Wink So do not get in to buy/sell decisions now..
However i must train my eyes more..but I wonder why it seems different from gann's charts scratch

8DIMO with double bottom ? Empty Re: DIMO with double bottom ? Mon May 30, 2011 8:50 pm

dr kiru005

dr kiru005
Senior Equity Analytic
Senior Equity Analytic

click on the attachment under my first post to see the dimo last 3 months pattern.. and see the volumes with the prices to me it looks more like double bottom?

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