1. FOR WHOM 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.
Using one can identify probable accumulation or distribution regions by comparing the historical at Price and current at Price.
2. If the current is low, its mostly a pause before the trend resumes
3. If the current 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 is called Point of Control. This is the level where max of transactions have taken place.
1. Stock formed a big triangular pattern, gave breakout and then rallied.
2. Recent it formed a flag-pennant-like pattern i:e a brief pause.
3. That can be confirmed by the in that region. Mark the low as compared to the high when it started rising.This confirms that the current pattern was just a pause. And thus when breakout happens the uptrend will resume.
TARGET WITH LOGIC-:
Since its a brief pause. and within that pause buying ( green,blue) is more than selling (red ) . There is a high chance the current expected up-move should be kind of equivalent to previous move (could be more too).
So a Fib Extension 100% target seems feasible.
Entry at CMP since it has just given a breakout out of the small triangular pattern with trend-lines tested at least 3 times gives us a nice conviction.
1450 and 1165 are good support levels. But since 1450 is too close to CMP , it will be a narrow stop-loss. Thus a conservative stop-loss is better for a swing trade in 1W.
So 1165 could be a good spot.
Its necessary to trail stop-loss as per your strategy. You may use Moving Average with ATR(14) as buffer.
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 pattern in 1W timeframe, stop-loss can be trailed to a nearby .(Like Candle Low)
2. If there is Divergence in 1W timeframe, better to exit at close of 1W since afterwards there can be long consolidation or reversal.
3. If the trailing stop-loss is hit, please exit
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