Tata Motors Divergence Setup 29 July 21

divergence Trading

Tata Motors is showing divergence from 26 July to 28 July and given a reversal confirmation after closing above HA Smoothed on 1 Hr chart this morning. Price was dropping sharply until this and clear divergence being shown by RSIDIV-I and RSI DIV-III.

I normally take signals by RSIDIV-I alone seriously if reversal is confirmed. So, here we will go long from this level. There can be two ways of going long for a short term.

Strategy -I

Either I will buy shares at this level (Present price around 292), SL 283 and Target of  305-307, which appears to be previous resistance. Risk reward around 1.6

or

Strategy -II

Sell Tata motors Aug Put 280 and buy Put 260. This is a high probability trade, though risk appears to be more than reward.

 

Update 03 Aug 21

We’re on target of 300+. Since we have hit a resistance above, further price movement will be volatile

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