Stock of the Day – MindTree

Mind Tree has been one of the stronger performers in the recent rally that was seen in IT stocks. The daily chart seems to show a classical pattern of a Cup. Now, this can evolve in two ways

1. We can see a reaction and if the reaction is not more than 50% of the size of the cup, the pattern will become a cup and handle formation

2. The stock can just brush across the high of the cup in which case, this will be a pure breakout of a Cup formation with target comign to around 2000.

Or it can just react from the current juncture and break the low of the cup which will be indicative (and not a clear case of ) double top formation.

Of the three, I currently favor the first option looking at the strength of the stock with the probability of this being a top being pretty low.

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About Prashanth

Have been a full time participant in the stock markets since 1996. Run a Yahoo Group where focus is exclusively on discussions of the Indian Markets using Technical Analysis as the tool (groups.yahoo.com/group/technical-investor)
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