Here's a beautiful case study of a pharmacy stock called Auropharma. This stock opened near previous close with bearish candle. The open candle appeared near 687 levels from where a selling had come during last session. A strong bearish candle followed asserting bears were in control. At this time I drew a channel containing correctional pattern in it. Price breached the lower band of the channel.
That was the time I drew a short trade box to how this
particular price action will pan out. The details are as follows. Entry is @
679.1, stop is @ 681.5, and the target was fixed @ 670.9. Near 670 levels a
confluence of weekly pivots '-P', 'S1' was present. My thought was price would
get attracted to that confluence. The plan earned 9 points. The bearish
conditions of broader index fueled the price downwards. Later price bounced
back to open levels in a wedge formation.