IRCTC, in tight zone, use AVWAP to get BUY/SELL signal
Anchored volume weighted average price or simply AVWAP is a previous meaningful benchmark price on a chart chosen by traders that quantifies the average price a market has traded at through a time period, based on both volume and price. This metric is important because it provides traders with a visual into the nature of the trend and the average technical value of a stock from a defined starting point.
An anchored VWAP can thus be used to represent the ‘pain/pleasure’ limit of an average purchased share since that event, top or bottom. Anchored VWAPs turn out to be very good resistance and support lines. A confluence zone on AVWAP from top and bottom shows value area, where both buyers and sellers are in equilibrium.
IRCTC is has taken multiple resistance from AVWAP from top, but it has not resulted in selling pressure and it not trading in tight range of ~3% between both AVWAP (ie 1410-1366).
When price goes above top AVWAP (red line), one can go LONG with trailing SL based on AVWAP from bottom (green line).
Similarly as SELL would be generated when price goes above below bottom AVWAP (green line), trailing SL based on AVWAP from top (red line).
An anchored VWAP can thus be used to represent the ‘pain/pleasure’ limit of an average purchased share since that event, top or bottom. Anchored VWAPs turn out to be very good resistance and support lines. A confluence zone on AVWAP from top and bottom shows value area, where both buyers and sellers are in equilibrium.
IRCTC is has taken multiple resistance from AVWAP from top, but it has not resulted in selling pressure and it not trading in tight range of ~3% between both AVWAP (ie 1410-1366).
When price goes above top AVWAP (red line), one can go LONG with trailing SL based on AVWAP from bottom (green line).
Similarly as SELL would be generated when price goes above below bottom AVWAP (green line), trailing SL based on AVWAP from top (red line).
Trade active
Buy trade got active today at 1413 and reached Target1. 12% profit in a day.Made high of 1597( rejection from prev swing high of 1595). Once it is crossed targets of 1800+ would open.
Hold with trailing stoploss (1370 currently) based on bottom AVWAP.
Trade closed manually
Stock made a strong bearish candle, in the short term it has ran up ~30% in 3 days and was over bought. Trailing stoploss based on ATR(10,2) on 75min got hit at 1647.Short term traders should exit in zone of (1650-1670). That is ~20% gain is 3days.
Medium term can remain invested for 1865/2000 targets with updated stoploss of today's low 1596.
Note
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