iCharts Discussions

[sumesh_sol]

I was just trying to analyze (and devise trading strategy) based on what would be people's reaction as the price is unfolding. It may just be a fantasy also .

Request you guys to come up with your views.

After a smooth long run since feb, price halted @ 1300 level where it tried to make another failed attempt to move past it. Now here I assume people who were long since beginning would like to book profits on break of point (1) or at point (2).
New set pf buyers sensing deep pullback in a nice trending stock might have bought at A & B . Many of them would have probably booked at previous top (1300) , and many late buyers might like to exit once price breaks C. This results in exhaustion of old and new buyers.

Now , with this *assumptions* does it not make sense to initiate Short position below point-C (1260) with SL little above 1300 ?? Tgts could be 1135 (swing low) & 1045 (flip of previous swing high)..

Any more suggestions on this please ??

[amitagg]

One of The most interesting post since I joined icharts ( except some similar analysis method done by Sherbaaz)

Not looking at actual chart in software for precise comments but the picture given be you:

1. Irrespective of crowd behaviour which unfolds( explained later) ( Fii Dii hni retail all being part of this crowd)..... I agree with your " entry point" for shorts

2. Exit point - first tranche ( or even more that 50 percent ) can be base of big bull candle after point B ( eg 1190 odd giving 1.5 RR)... This is also " untested professional demand level" ( I cannot explain more than this in his forum) ( it has nothing to do with candlestick based trading)

This would save the risks if the following medium trend is "sideways"

Why I mentioned even more than 50 percent profit booking here ( though swing RR should be at least 3:1) is because a re entry short can be taken basis price action AND sector action AND nifty action then - this is called " top down approach"

3. Now coming to what is " possible scenarios for crowd behaviour"

- option a : harmonic in play and since prices gave retraced 80 percent and upmove beyond 1300 to target 1.27X is possible

Your trading strategy fits this scenarios as well except the following 2 comments ( one variation can be short entry below a fibo retrace of say 61.8 percent of last bull move from point A/ b etc. but this shall lower the RR as per my method above not so much in your exit points) ( two if your entry short taken, price may move below 1260 to trigger shorts " but not by much" and then move to 1300 or little above or 1.27 above subsequently triggering a loss exit)

- option b: as per al brooks, this action triggers two steps down from top of " swing failure top" ie where prices did not break 1300 earlier reached but came close. This means that one additional down move below the current swing low should unfold.

But My interpretation of this however over the years has been that in " bullish conditions" this " price pattern" leads to further bullishness seen in dr reddy and others ( doubt this time sincerely bullish trend shall continue since I am not very bullish on nifty and china pmi etc down bla bla)- this is divulgingg from pure chart price crowd analysis, nevertheless

4. Suppose or assume for time being that market was very bullish and stock was bullish due to discounting of favourable fundamentals etc... Suppose.... Then in that situation this price action would have " enabled the big guns or better word winning crowd whichever faction it may be " to get longs exit, get entry for shorters, and then move price up up... To leave both longs ( no opportunity profit) and shorts ( actual loss) aside.

This cannot be predicted .... Therefore to predict crowd behaviour we have to rely on TA also. U are basing a trading decision basis estimation of price movement which has " still NOT fully reflected of the crowd behaviour or what the crowd wants to do". This for me is a very Important point ( irrespective r of whether u are right or wrong because by toss of coin also we can be right 50 percent of the time )

5 shall come back with more thoughts

[amitagg]

PLEASE READ THIS POST and SUMESH POST ONLY

A problem with such posts however it that independent view which u want to get can never be there..... For example people viewing your post and then mine shall be " prejudiced" " naturally" or better word " sub consciously" whether it it felt or not, by the comments.....

And each successive post shall suffer from this even more..... ( this is based on one MTA video I had seen as to how our thoughts are aligned or adjusted.... )

But a more critical analysis is an advantage..... And that is most we can do

Note: request all members who see this to have their view framed basis on Sumesh post and no others and then read other posts and then see how they would like to refine their views and possibly post both views

This would actually help to understand psychology. And have THIS post copied and pasted on top of all your comments( if at all)

[sureenderkalra]

Stock is still in uptrend and trading between trendline and sliding trendline. It might touch 1399 -1460 on upper side once it breaks sliding trendline and has a fair chance of any major correction from this point.

On the other hand, RSI is with hidden divergence which it indicates it might move down as you expect. But I dont think it will move below 1215 if c point marked by you is broken. We should recheck this once it touches 1215.

Chart is attached.

[dynamite_munda11]

jswsteel imho is probabily doing a flat as 335 and has probabily completed B wave at 1300 or would complete max at 1309, down C trgts are mentioned on chart and stop loss mentioned for shorts

[amitagg]

[welgro]

Upward Sloping Neckline. upward sloping neckline of the reverse head and shoulders pattern. A line drawn between the two peak highs is called the neckline.

[chiragbvyas]

Dear Friends,

I am also Joining the discussion...

As per my T A ... The views are

- A close above 1439 will be on Break Out for long term Bull.

- Once it happens ..on retress up to 1365 one can add long with s l of 1292. if close below 1292 long trade is over and any rise up to 1439 can be shorted with 1439 closing base stop loss.

- A close below 1148 will be break down for long term Bear.

- Once it happens .. on retress up to 1220 can be shorted with closing base s l of 1294, if close above 1294 then short trade is over and any decline up to 1148 can be bought with closing base s l of 1148.

So all we have to do is remember just 5 figures ...

1439 - 1365 - 1292/1294 - 1220 - 1148

Let us see how it unfolds and how price behaviour gives honour to above levels. (All stated numbers are of NSE spot).

Hope this will be helpful to Swing Traders ....

[chiragbvyas]

Dear Friends,

I would like to add Jindal steel as a case study, hope nobody will oppose as it is posted in JSWSteel thread ... as it has seen heavy down fall , but as per my T A it has tested only supports and not broken or closed below them... have a look ...

For JINDALSTEEL My views are ..

Just five figures ..

281.45 - 267.25 - 252/254 - 238.90 - 224.72

Just see bottom & close, just like an Edge !!!

You know from JSW post , how to play these numbers ...

This just for noticing purpose that the script was more than 15% down but my level of s l is saved. So i will go long with closing base s l .

Hope it will help who want to take advantage of downfall in this script.

[chiragbvyas]

[kishjk7551]

I am long in this counter @ 239 with closing base s l of 224. Anyone who is long ?[/quote]

Count me in Chirag.

[chiragbvyas]

JIndalstel ...

The rewarding trade that taken long yesterday

Now waiting for tgts as 253 267 281 will book 25 % @ each lvl last 25 % purely @ s l

[chiragbvyas]

[sumesh_sol]

[amitagg]