Disclaimer-:
1. FOR WHOM VOLUME PROFILE AND MY METHOD IS A LITTLE NEW OR BLURRY . I WILL SOON PUT UP AN EDUCATIONAL POST WITH DETAILS AND EXAMPLES. WE CAN HAVE A SERIES OF DISCUSSIONS THERE TOO. DO FOLLOW MY ACCOUNT TO GET NOTIFIED.
2. Do ask your questions in the comments if any.
Volume Profile-:
Using Volume Profile one can identify probable accumulation or distribution regions by comparing the historical Volume at Price and current Volume at Price.
2. If the current volume is low, its mostly a pause before the trend resumes
3. If the current volume is higher or equivalent to historical levels then either the trend will resume or it may reverse. If it resumes then we have more strength in trend due to more accumulation. So a breakout/breakdown will confirm in this case
POC-: The red line in volume profile is called Point of Control. This is the level where max volume of transactions have taken place.
Firstly
GRASIM has been rallying since a long while. With a hell lot of green volume it has been rising. Recently it took a pause to consolidate.
Now a consolidation can be either accumulation or distribution.
We observe the recent consolidation volume to be the highest since the rally began. So it is either accumulation or distribution.
But I would bet on accumulation because-: (refer to point 2 in volume profile)
IMPORTANT OBSERVATIONS-:
1. The consolidation happened in an up-sloping, triangular manner i:e higher lows and faced resistance at the same 1500 level 3 times making the resistance level strong.
2. 3 times tested resistance line was broken with nice volume. Moreover each time it retraced it was on low volume.
This gives us confirmation of an accumulation region along with breakout
TARGET
Now the accumulation has a lot of volume, the highest since the rally started. So it makes sense to assume the current expected rally should be at least of that maginitude.
More the accumulation, greater the strength, so the more the move.
So I used a Fib Extension from the recent accumulation region and a target of 100%(at least)
Entry
Confirmatory breakout has happened but price is still there giving us space and favourable RR ratio to enter. So entry at CMP .
STOP-LOSS
Since we are expecting a nice uptrend to continue with target high enough and again as it is swing trade, a conservative stop-loss will be better
Since 1260 is a nice support levels and just above the previous small, minute pause during 2Feb - 1Mar 2021, so i would prefer the stop-loss around that level.
Keep trailing stop-loss as per you strategy. Using Moving Averages with ATR( Average True Range ) as buffer is one of the ways.
EXIT
Since the target is above all time high. Its a provisional target level. So it doesn't make sense to exit at target rather hold on to it as much as possible and keep conservatively trailing stop-loss. Following can be used as exit signals or bearishness signals.
1. If there is bearish candlestick pattern in 1D timeframe, stop-loss can be trailed to a nearby support level .(Like Candle Low)
2. If there is RSI Divergence in 1D timeframe, better to exit at close of 1D since afterwards there can be long consolidation or reversal.
3. If the trailing stop-loss is hit, please exit
**IF YOU LIKE MY ANALYSIS, KINDLY GIVE A THUMBS-UP AND SHARE IT IF POSSIBLE, HELPS A LOT :)
**I WILL POST NECESSARY , SIGNIFICANT CHANGES IN THIS THREAD LIKE ADDITION TO POSITION, EXIT SIGNALS, BREAKOUT ETC.
TO AVOID MISSING OUT ON UPDATES PLEASE REMEMBER TO FOLLOW THE POST AND MY ACCOUNT.
**YOU CAN TURN ON NOTIFICATION TO BE UPDATED OF CHANGES
**ANY COMMENT ON THE ANALYSIS WILL BE HIGHLY APPRECIATED.
GRASIM
1. FOR WHOM VOLUME PROFILE AND MY METHOD IS A LITTLE NEW OR BLURRY . I WILL SOON PUT UP AN EDUCATIONAL POST WITH DETAILS AND EXAMPLES. WE CAN HAVE A SERIES OF DISCUSSIONS THERE TOO. DO FOLLOW MY ACCOUNT TO GET NOTIFIED.
2. Do ask your questions in the comments if any.
Volume Profile-:
Using Volume Profile one can identify probable accumulation or distribution regions by comparing the historical Volume at Price and current Volume at Price.
2. If the current volume is low, its mostly a pause before the trend resumes
3. If the current volume is higher or equivalent to historical levels then either the trend will resume or it may reverse. If it resumes then we have more strength in trend due to more accumulation. So a breakout/breakdown will confirm in this case
POC-: The red line in volume profile is called Point of Control. This is the level where max volume of transactions have taken place.
Firstly
GRASIM has been rallying since a long while. With a hell lot of green volume it has been rising. Recently it took a pause to consolidate.
Now a consolidation can be either accumulation or distribution.
We observe the recent consolidation volume to be the highest since the rally began. So it is either accumulation or distribution.
But I would bet on accumulation because-: (refer to point 2 in volume profile)
IMPORTANT OBSERVATIONS-:
1. The consolidation happened in an up-sloping, triangular manner i:e higher lows and faced resistance at the same 1500 level 3 times making the resistance level strong.
2. 3 times tested resistance line was broken with nice volume. Moreover each time it retraced it was on low volume.
This gives us confirmation of an accumulation region along with breakout
TARGET
Now the accumulation has a lot of volume, the highest since the rally started. So it makes sense to assume the current expected rally should be at least of that maginitude.
More the accumulation, greater the strength, so the more the move.
So I used a Fib Extension from the recent accumulation region and a target of 100%(at least)
Entry
Confirmatory breakout has happened but price is still there giving us space and favourable RR ratio to enter. So entry at CMP .
STOP-LOSS
Since we are expecting a nice uptrend to continue with target high enough and again as it is swing trade, a conservative stop-loss will be better
Since 1260 is a nice support levels and just above the previous small, minute pause during 2Feb - 1Mar 2021, so i would prefer the stop-loss around that level.
Keep trailing stop-loss as per you strategy. Using Moving Averages with ATR( Average True Range ) as buffer is one of the ways.
EXIT
Since the target is above all time high. Its a provisional target level. So it doesn't make sense to exit at target rather hold on to it as much as possible and keep conservatively trailing stop-loss. Following can be used as exit signals or bearishness signals.
1. If there is bearish candlestick pattern in 1D timeframe, stop-loss can be trailed to a nearby support level .(Like Candle Low)
2. If there is RSI Divergence in 1D timeframe, better to exit at close of 1D since afterwards there can be long consolidation or reversal.
3. If the trailing stop-loss is hit, please exit
**IF YOU LIKE MY ANALYSIS, KINDLY GIVE A THUMBS-UP AND SHARE IT IF POSSIBLE, HELPS A LOT :)
**I WILL POST NECESSARY , SIGNIFICANT CHANGES IN THIS THREAD LIKE ADDITION TO POSITION, EXIT SIGNALS, BREAKOUT ETC.
TO AVOID MISSING OUT ON UPDATES PLEASE REMEMBER TO FOLLOW THE POST AND MY ACCOUNT.
**YOU CAN TURN ON NOTIFICATION TO BE UPDATED OF CHANGES
**ANY COMMENT ON THE ANALYSIS WILL BE HIGHLY APPRECIATED.
GRASIM