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.
VALUE REGION-:
The violet region highlighted in volume profile is called value region. This is where 70% of total volume of the volume profile lies.
It means this region has value so, many transactions took place.
Firstly-:
NBCC fell steadily and nicely for a prolonged time in a wedge like formation (triangular). Recently Falling Wedge Breakout has happened. Moreover price has been rising in a small up-sloping channel making higher highs and higher lows.
In wedge pattern the trend lines have been tested at least 3 times. So the breakout is strong
IMPORTANT OBSERVATIONS-:
1. Recent Volume is extremely high as compared to volume when stock fell and since the price is rising making higher lows so definitely its an accumulation and soon there will be breakout and uptrend.
2. The upcoming region 50-70 has relatively high volume. This means the stock may stay there for a while or within that level it might face multiple resistances. Moreover 50-70 was previously an accumulation region.
3. But above 70 level volume of stock falling is very very low which means there is weak resistance. So once the stock breaks out of 70 level it might smoothly move upwards.
TARGET WITH LOGIC
1. Since the all the time high level, 146
NBCC
stock has been falling with very low volume . While now the volume of accumulation is too high, so there is a high chance it can easily reach the all-time high. Moreover it might even go more than that, but it depends what happens after the breakout.
ENTRY-:
1. A risky entry would be above 50 level since 50-70 is in value region, so stock might face multiple resistance , or it might stay there in sideways and you want have capital appreciation
2. A better entry would be confirmatory breakout above 70 level since its a very strong resistance level and its less risky.
I will update here when breakout happens
STOP-LOSS
If your entry is above 50, 25-30 is a good stop-loss region. If it is above 70, 50 would be conservative stop-loss.
Stop-loss is deep but if your expected return or target is high, you have to put conservative stop-loss to avoid being stopped out unnecessarily. Since its a intermediate-term swing trade, a conservative stop-loss makes sense.
**STOP-LOSS should be trailed as per your strategy. One of the best is to trail with Moving Average in 1D timeframe with ATR( Average True Range ) as a buffer.
EXIT
Sometimes we have to exit before target is reached if there is bearishness. Following can be the clues of bearishness-:
1. If there is bearish candlestick pattern in 1W timeframe, stop-loss can be trailed to a nearby support level .(Like Candle Low)
2. If there is RSI 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
4. If you want , you can keep a target level lower than the all time high and exit at Target. Possible levels are 100 and 120.
**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.
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.
VALUE REGION-:
The violet region highlighted in volume profile is called value region. This is where 70% of total volume of the volume profile lies.
It means this region has value so, many transactions took place.
Firstly-:
NBCC fell steadily and nicely for a prolonged time in a wedge like formation (triangular). Recently Falling Wedge Breakout has happened. Moreover price has been rising in a small up-sloping channel making higher highs and higher lows.
In wedge pattern the trend lines have been tested at least 3 times. So the breakout is strong
IMPORTANT OBSERVATIONS-:
1. Recent Volume is extremely high as compared to volume when stock fell and since the price is rising making higher lows so definitely its an accumulation and soon there will be breakout and uptrend.
2. The upcoming region 50-70 has relatively high volume. This means the stock may stay there for a while or within that level it might face multiple resistances. Moreover 50-70 was previously an accumulation region.
3. But above 70 level volume of stock falling is very very low which means there is weak resistance. So once the stock breaks out of 70 level it might smoothly move upwards.
TARGET WITH LOGIC
1. Since the all the time high level, 146
NBCC
stock has been falling with very low volume . While now the volume of accumulation is too high, so there is a high chance it can easily reach the all-time high. Moreover it might even go more than that, but it depends what happens after the breakout. ENTRY-:
1. A risky entry would be above 50 level since 50-70 is in value region, so stock might face multiple resistance , or it might stay there in sideways and you want have capital appreciation
2. A better entry would be confirmatory breakout above 70 level since its a very strong resistance level and its less risky.
I will update here when breakout happens
STOP-LOSS
If your entry is above 50, 25-30 is a good stop-loss region. If it is above 70, 50 would be conservative stop-loss.
Stop-loss is deep but if your expected return or target is high, you have to put conservative stop-loss to avoid being stopped out unnecessarily. Since its a intermediate-term swing trade, a conservative stop-loss makes sense.
**STOP-LOSS should be trailed as per your strategy. One of the best is to trail with Moving Average in 1D timeframe with ATR( Average True Range ) as a buffer.
EXIT
Sometimes we have to exit before target is reached if there is bearishness. Following can be the clues of bearishness-:
1. If there is bearish candlestick pattern in 1W timeframe, stop-loss can be trailed to a nearby support level .(Like Candle Low)
2. If there is RSI 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
4. If you want , you can keep a target level lower than the all time high and exit at Target. Possible levels are 100 and 120.
**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.