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Continuation

How to trade in and out of a sideways range?Horizontal price movement is seen when the powers of demand and supply are roughly equal, thus forming a "sideways trend". This usually occurs during a period of consolidation before the price continues a prior trend or reverses into a new trend. A sideways trend is also sometimes referred to as a "horizontal trend". _____________________________________________________________________________________________________________________________ An important indicator is volume, which usually remains flat during a sideways trend as the bulls and the bears balance out each other. A surge in volume is seen when the breakout or breakdown is expected to occur. _____________________________________________________________________________________________________________________________ Ways to profit from a sideways trend : 1. Typically traders will try to capitalize on breakouts or breakdowns, to try and ride the momentum in the direction of the break, thus generating profits. But breakouts are prone to failures, so a more prudent approach can be to wait for a re test of the level price broke out from and then initiate the trade. 2. If the price regularly rebounds from the support and resistance levels as can be seen in the chart, traders may try to buy the security when it nears the support levels and sell it when the price nears resistance levels. _____________________________________________________________________________________________________________________________ Now, as we can see that the price of IGL was bouncing around in the sideways channel. It failed to move past 545 on 09.04.21 and 11.06.21. Similarly it bounced back from 500, at 5 occasions, on 25.03, 06.04, 19.04, 30.04 and 21.05.21. It finally broke out above 545 with above average volume on 29.06.21 and soon made a high of 584. It travelled almost the width of the range after breaking out as is expected. And then it started pulling back and has touched the top of the range. A continuation candle with strong volume has occurred now. _____________________________________________________________________________________________________________________________ A long can be initiated with the following levels in mind if the price sustains above the "LONG ABOVE" level for 15 minutes. LONG ABOVE: 548.70 STOP LOSS: 534.80 TARGET 1: 562.60 TARGET 2: 576.50 _____________________________________________________________________________________________________________________________ Trade your plan and manage your risk effectively. Like and follow for more. :)
NSE:IGLEducation
by Tradeception_
2
BULLISH FLAG PATTERN EXPLAINED.Bullish flags are a continuation pattern found in stocks with a strong uptrend. As can be observed, the pattern resembles a flag on a pole. The vertical rise forms the pole and the following period of consolidation forms the flag. The flag can be a horizontal rectangle but mostly angles down from the pole. The focus should be more on the underlying psychology of the pattern than the shape. Despite the strong vertical rally, the stock refuses to drop much because the bulls are buying as many shares they can get their hands on. ________________________________________________________________________________________________________________________ Main characteristics of a flag pattern: 1. The trend before the appearance of the pattern. 2. The channel of consolidation. 3. The volume behavior. 4. The breakout. 5. The confirmation of price movement in the direction of the breakout. _______________________________________________________________________________________________________________________ Target and Volume: The target for a bull flag is calculated by measuring the length of the flag pole and projecting it from the breakout point. The volume starts to pick up towards the end of the consolidation range indicating the oncoming breakout. Then there is a huge increase in volume when the pole is being formed and the volume tapers off during the consolidation period. ______________________________________________________________________________________________________________________ Stop Loss Options: 1. Longer term traders may place their stop loss below the entire flag. 2. A stricter option would be just below the consolidation are before the breakout. 3. The tightest option would be a two bar low trailing stop. ______________________________________________________________________________________________________________________ Thoughts: No one can know for sure which way the price will move, whether it will continue or reverse. One can follow the action of price, trade only the best setups and let the probabilities work out. While patterns may give false signals, bullish flags are generally reliable and effective. ______________________________________________________________________________________________________________________ Alert: Keep an eye out for price action unravelling currently. Price is pulling back to the 20 EMA, forming a consolidation, a flag of sorts. A continuation candle near the average with decent volumes could be the sign of a fresh move upwards. _____________________________________________________________________________________________________________________ Will be very grateful for a like and follow. :)
GEducation
by Tradeception_
7