1. This indicates that buyers have lost their strength. The buying momentum is fading out. While demand has been pushing the stock price higher, there was significant selling. 2. The buyers managed to bring the price back to near the open, the initial sell-off is an indication that the price has likely peaked. 3. The massive volume on Doji represents significant unwinding of long positions. 4. The price may even consolidate instead of falling down. But there is no use in holding a position during consolidation(until and unless you are a long-term investor) because that has a huge opportunity cost. 5. This can be the right time to close your existing long positions. 6. Obviously, don't take my word for it. I am nobody. Try to do your own analysis, observe the price action, check the response of the market, and take your decision accordingly
You are always advised to use an appropriate Risk-Reward ratio as per your strategy.
P.S:This is NOT investment advice. This chart is meant for learning purposes only. Invest your capital at your own risk.
@sohamdey76, I was wrong in this one. It seems to be consolidating at the moment. Moreover, it has given a fresh Breakout on the weekly, hence the momentum may continue. Cheers!
utkarsh1307
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Sir, can you do analysis for the ALLSEC, i am trying to draw fibbo to get levels but not sure which one should i use retracement or extension.
johntradingwick
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@utkarsh1307, The price has rallied and we are expecting a fall. Hence we would use, the Fibonacci retracement to get potential levels for a pullback entry.
If we take the present Swing high and low, it looks like this:
utkarsh1307
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@johntradingwick, thanks a lot sir..got that when to use retracement and extension. But i have query why you selected 4 hours not daily timeframe? Also why the low point is selected as around 388 not 416 ? Apologies if they are silly questions but i want to understand the reasoning behind this.
mamathacharan6
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Good afternoon sir
Y up side u drawing in Fibonacci retracemnet
I don't understand sir
johntradingwick
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@mamathacharan6, That is how you will get the retracement levels. In an uptrend, to get the Fibonacci retracement levels, you must draw from the swing low to swing high. That is how you will get the levels. You should read my Fibonacci post, it'll help you out.