How to spot high-probability trend reversal zone using Trend line, Moving Averages and Fibonacci

How to spot high-probability trend reversal zone using Trend line, Moving Averages and Fibonacci 

There are a number of characteristics to become a successful trader, but if I have to hand pick the single most important characteristic of successful trading it would be to identify right entry point and the exit. There is one popular saying in trading community “The Trend is your friend until the end when it bends.”- Anonymous.

So the next question arises how to identify the right entry point in short how to identify trend reversal in the stock? Well, there are a number of tools and study practiced over the year by expert to spot trend reversal in the stock market. However, some were successful in doing it and on the other hand, some ended catching a falling knife and some fell off from a top i.e. calling the reversal too early. So which tools and studies are used by the successful trader’s in spotting high-probability intrend reversal zone.  Following are some important tools and studies used to spot reversal zone.

I’ll share a case study using above tools and studies to spot reversal zone.

Above is the daily chart of Kitex Garments BSE Code 521248, stock formed a Bullish Marabuzo candlestick pattern and this is a powerful bullish candlestick pattern as price has been dominated by the bulls and it entered into a bull run and went on to make high of Rs 1072.1 in the span of three months, since than stock face strong distribution around these levels and saw a gap down opening and entered into a downtrend. However, the stock found support around the levels of Rs 568-575 and created double bottom as marked in the chart and this pattern is a strong reversal pattern (Trend Line). Stock after forming a double bottom started scaling higher and in this process forming a higher top higher bottom pattern. It managed to cross its first hurdle which is a 200-day EMA (Moving Average) and recently the stock managed to cross its Fibonacci golden ratio hurdle of 61.8 per cent (Fibonacci) retracement around the level of Rs 794.39 and it accelerated to levels of Rs 850. 

Disclaimer : This is not a recommendation to buy or sell for stock,