An Example of a Dangerous Base
- Rohit Musale, CFA
- Dec 31, 2025
- 2 min read
This is a daily timeframe chart of Anand Rathi Wealth.
If you notice on this chart, on 29th October 2025, it completed a falling window.
Now, as you know, a falling window is a Japanese candlestick terminology.
A window has an upper line and a lower line.
The upper line of the window in this case is the low of the 28th October candle, which is 3170.
And the lower line of the window is the high of the 29th October candle, which is 3150.
I have marked the upper line of this window with a blue horizontal line.
If you notice from 29th October till today, which is 31st December, there is not a single candle on this chart that has broken that blue line on the upside.
So, it goes to show how powerful Japanese candlesticks are.
The falling window tends to act as a resistance.
I have drawn the color-shaded base here, but this window is one of the primary reasons that I have rejected the stock.
I would prefer to stay away from this.
Of course, there are other reasons as well because of which I have chosen to reject the stock.
But the purpose of this particular message is to help you understand the significance of the resistance created by the falling window.
In western technical analysis, they call it a gap.
It is better to stay away from such stocks unless the falling window inside the base is broken.
Because, we do not have bullish confirmation inside the base.
As you know, I do five kinds of analysis when I am looking at a swing trade or a positional trade.
Liquidity
Comparative
Technical
Fundamental
Market
Falling window comes as a part of technical analysis.
So this is one reason to reject a stock.
In the other four kinds of analysis, you might find a reason to reject this stock as well.
So even if the falling window gets broken on the upside, that does not mean that I am going to buy the stock.
I will have to do all the five kinds of analysis again to see whether it finally fits my criteria.
As of now, if I check, it does not meet one of my comparative criteria which is market leadership.
It does not come in the top five within its own industry group when we look at market capitalization.
So, I would prefer to stay away from the stock.
I am just giving you my reasons for rejecting the stock so that you understand the thought process here.
Stay away from a falling window.
This will keep you away from trouble and unnecessary headache.
I have seen too many disasters happen once a falling window appears on the chart.
Why take risk ?
Just be careful and cautious.
Do not force a trade.
Maintain patience.
Regards,
Rohit Musale, CFA
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