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Tata Global Beverages – Consider two important points before you Trade

Price action Breakout and Trending Higher

Tata Global Beverages (NSE: TAGL) subsidiary of Tata Group and world’s largest manufacturer, distributor of tea and major producer of Coffee is showing some bright signs of Improvement. 2017 was a solid year for the company; Share prices rallied from 120 to 250 per share, so far it has outperformed not only nifty, but also other major stocks from the same sector. Company is experiencing major benefits, because of its earlier restructuring operations.

Technically, Prices broke the long-standing resistance zone at 150 in the period of April – May. After breaching the resistance zone, prices rallied in one move without any significant retest or retracements. Before this upside breakout we can witness an aggressive selloff that show bears positioning in expectation of lower prices. Breakout from the resistance must have trapped these sellers, whose liquidation in turn drove the prices higher.

Price Action Indicates Climax Formation in Monthly Chart

Buying Climax Price action formation in Monthly time frame

Even though fundamentals are positive about Tata global beverages, Traders must consider two points before initiating any trades. First thing, if trader’s expectation is to position with the uptrend then it’s better to wait for retracements or correction and avoid trading at highs. Second thing is to consider the Price action on monthly chart; higher time frame structure in monthly chart is indicating a climax pattern, so there are possibilities of price action reversal. Traders must read the charts and keep an eye on fundamentals to get a directional bias to trade.

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