The stock has been trading in a channel for 6 months. Big accumulation volume bars could be seen throughout the channel. Finally gave a breakout on huge volume. The price has now come back to retest the breakout area. It may take support at the 20VWMA (Green line) and bounce back once the earnings are announced in a couple of days. RSI is above 50, Relative strength line is above NIFTY.
Moving along with sector.
SL: Depending on your risk appetite: Below Weekly BO Candle / Below Daily BO Candle / 50% of Weekly BO candle / Below 20DMA TGT: After a 10-15%+ vertical move, breakdown of 20MA on Hourly chart (on a daily close basis)
BUY GUIDANCE: Never ever buy before 3PM. I have been burnt many many times.Try to buy between 3:15 - 3:30PM, later the better.
SELL GUIDANCE: Selling in Profit: Sell earlier in the session when the prices are higher, around 11AM.
Selling at SL: Give your stock a chance to recover by end of session. If it doesn't recover, sell anywhere between 3:00 - 3:30PM.
Note: I reserve the right to be wrong.
DISCLAIMER: I am not a SEBI registered analyst. Please consult your financial advisor before investing.
This is purely speculative and somehow has worked for me. Here’s my rationale (and I could be completely wrong here). I learnt a simple intraday scalping strategy by Oliver Valez. He mentioned that if a stock is in an intraday uptrend, more stocks will follow the 20sma (on 2min chart) than a 10 or 50sma. So his strategy is to buy any and every engulfing candle on 20sma throughout the session. Combine this with another fact, that Technical analysis works in fractals, meaning a widely acknowledged general behaviour would be as true on a daily chart as it is on a 2min chart. Now, coming to your question, I am primarily a volume trader because any operator in a small cap stock is almost certainly a volume trader because most of these stocks aren’t in F&O. So if these stocks go down, they decline due to lack of buying and not due to shorting. And that’s why volume is a better representation. VWMA gives more weight to prices where the volume has been high (meaning, the prices where smart money has bought) and negligible weight to prices of smaller/retailer volumes. I’m of the opinion that any smart operator would not let the price go below his average buy prices over 20 sessions. This is not to say 50VWMA won’t work, but I’d like to believe those operators are slower and fewer than the 20VWMA ones.
monkmaxims
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@raavigeorgian, this is so well researched and rationally explained with depth ! It gives so much clarity and direction to a novice like me. i cannot appreciate your efforts enough man in sharing this knowledge that was just out of my reach and would have never deciphered on my own !! you are a fantastic teacher too ! Thank you buddy !!! Hope many more see this post of yours ! its just a beauty !
raavigeorgian
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@monkmaxims, Thanks man! I really enjoyed explaining it. And your comment was the cherry on the cake. Made my day. I look forward to many more such insightful discussions.
monkmaxims
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Hi @raavigeorgian, rookie question - is there a particular reason to choose the 20 VWMA as the support level ? is this better than say choosing 20ema or 50 ema for that matter ?
amansinghchauhan1805
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bro are u in Instagram ?
raavigeorgian
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@amansinghchauhan1805, Yes bro. I'm afraid you won't find anything related to markets over there.