Alchemist! this weekend I was checking charts of few scripts, all preceded by Bull run of 4-5 years

Especially on weekly charts, they all are forming some or the other topping patterns. Do you think I am over doing the analysis or is it true that the patterns are correct?

Example:

BHEL - Head and Shoulders
SESAGOA - Rounding TOP
EDUCOMP - Rounding TOP
Bartronics - Rounding TOP
SBI - Head and Shoulders
INFOSYS - Triangle Breakout, which way we don't know yet

They all need to confirm the pattern but am I correctly judging?

Many more I saw, I will add to list once I get home to my amibroker! .

The head-and-shoulder patterns are there, but I doubt these will really achieve their "textbook targets".

I expect the stocks to either hold the neckline or bounce back after a briefly breaking the trendline.

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Same for the rounding patterns.

Actually I am hesitant to call them as "rounding tops" as they are not smooth.

It's just that the speed of the uptrend is slowing decreasing.

I haven't checked, but usually when such patterns are formed, the RSI, MACD and other indicators start showing a negative divergence.

These divergences may either be on the daily charts or weekly charts.

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The Head and Shoulders pattern which appeared in NIFTY weekly chart, did achieve its target of Shoulder!

I don't have data before 1999, maybe it is good idea to check in past bear markets did we had such patterns and did they achieve their bookish targets in Indian context?

I am currently reading all time classic Edward & Magee, the guy presents nice view and charts from 1900 era! ....

At that point in time they did confirm, but in our case first it is Indian market and second it is 2008 (100 years).

I am also reading around and have felt most of the guys who are in market for 8-10 years don't believe in these patterns any more in Indian context?

Any idea why we don't believe in these patterns any more?

Another interesting piece of information I stumbled upon from history,

CHART: UNITECH

- Rounding Bottom formed somewhere in year 2002 and then started the BULL run for this script.
- This was the same time, Sundaram mutual funds managed by Anoop Bhaskar started performing, which coincides with the time when Rounding bottom was in making! I think this guy saw it:-)

I stumbled upon one chart where this rounding Top broke - OFF



Thus all the pattern formations should be closely watched for targets as well as breakouts!