BAJAJ AUTO: A breakout above 4048 with good volume breakout then we can chase for 4200 as initial Target. A further breakout above 4212 can push it till 4400. Need assurance with volume breakout before making an entry.
Stop Loss once breakout happens can be kept at 3940 below and further on next candle's low for safe trading.
I have a query . Why so no one is buying today when price is low but when it breaks , many people rush to buy at higher price . Then what is the guaranty that the price would not fall . So why at higher price .
chandanjha29
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@JagdishKumarPahuja, Well, that goes for the basics about trading - we can buy at CMP and we may get lucky if it goes for a successful breakout however note my word, its about being "LUCKY" and not being technically correct. This doesn't mean we can get it right 100% of the time when we buy above a price (breakout) but it gives us a higher PROBABILITY of being correct based on learnings from the past and technicals involved in stocks.
Details: What happens when we buy above a price that is a point of resistance. 2 things happen - 1. The sellers who were sitting at that point (in the past) must have had SL above that particular point. This means when the price moves about that particular resistance there is high chance the stop loss for those sellers are hit and buyers have taken over that range. Which gives us even higher upward move. The very important thing to note in such cases is the volume and the candle when its complete. We can go more detailed into it but that won't be suitable for this comment. 2. The BUYERS may push above that point of resistance but there is chance that the SELLERS push even harder and the price is pushed down again and that's when the breakout fails. Again its imp. to look at the volume and candle upon completion.
JagdishKumarPahuja
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@chandanjha29, Thank you. Your point is convincing & I agree with you for trading purposes . I try to be in the trade base on support & book profit on swing on break out . Enter again on pullback if it forms support above the breakout levels .Do not chase price. Thx once again .
chandanjha29
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@JagdishKumarPahuja, Thanks for connecting! That is again a good strategy for entry. Buying at support and selling at the resistance (near breakout level) Basically the logic works on the similar lines considering the SELLER/BUYER Psychology or the supply/demand zone.
I will agree to the fact that swing trade is a much better option where SL can be smaller and gains much bigger. Happy Trading!