Contraction
BERGEPAINT Pullback BreakoutBERGEPAINT showing clear pullback move on daily timeframe candle.
Preceding impulsive red candle with a large range followed by a small ranged green candle, hence trade the breakout of the pullback green candle in either direction.
Target 1% in either direction.
NOTE: Trade with confirmation of momentum & volume on lower timeframes in intraday.
ADANIGAS Pullback + Doji BreakoutPrice has been ranging & contracting with lower highs and higher lows since 3 days.
The last day has shown a doji with a small range indicating an imminent breakout.
The price may fall and retrace to its dynamic supports or continue its upward trend, thus keeping entry triggers for both circumstances with conservative targets.
NOTE: Trade with confirmation of momentum & volume on lower timeframes in intraday.
Avanti feeds (Something is cooking) Add to watchlistPrice is continuously contracting since the last 10 trading sessions and now they have arrived at a very crucial level to watch out for.
Something is really cooking and breakout on either side can be surely seen and you must keep an eye on this stock.
As per my level of thinking the stock should probably go upside after retracing 1% of the move and it will give breakout.
Backtesting VCP in GRSEVolatility Contraction Pattern in GRSE Backtested from August 2019 showing how the stock behaved post the pattern was formed and how the trade was executed.
Calculating the risk reward ratioA stock that is resting on or near its 50 DMA has a better chance going up than a stock far away from it. Have tried to explain this in the video, hope it helps you with your future trades. Do let me know if like the idea
Volatility Contraction Pattern in Deepak NitrateVCP in Deepak Nitrate was clearly visible with contractions falling down consistently, First being 42% then 11.7% and then finally the tightest one at 5.2%. This is when you take the trade. A contraction below 10% means the stock has now fallen into the strongest hands ( institutional buyers) and that is why i was not worried when it came back down after a day because when you buy a tight contraction there is a high probability of the stock bouncing back as institutes add to their positions.
Volatility Contraction Pattern in KEI KEI - The contraction in KEI dropped from 12 % to 4% over a period of 17 days. This means the weaker buyers were getting out and the stronger ones were accumulating which resulted in the stock shooting up 10% in the next 3 days post getting into very tight movements in the last 3 days of the total 17 days.
Volatility Contraction Pattern (VCP)#GRSE-bought at 140, after #vcp setup with the volatility drying from 13% to 6% .The Stock though was 80%(100 preferred) up from 52 week low so bought less. It shot up 25% in 14 days. Closed 25% quantity on that day and the rest today.
Total return 20% in 20 days.
Volatility Contraction PatterBataindia - Bought it after a volatility contraction pattern formation with the volatility dropping from 14% to 3% in the second contraction (marked by the green curve lines). A drop of 50% in volatility is good but in this case it dropped more than 50%, which means most of the weak buyers were out of the stock.
Institutional buying drove the price higher by 22% in 45 days.
Inside Bar FormationThe Chart shows Volatility in the price movement going down for two consecutive weeks, in week A it is 12%, in week 2 it goes to
8%. Now for us to be sure we need to see a drop of at least 50% from one week to another and from week B to week C we get that too. The contraction goes from 8% to 4% and the stock after going straight for a week goes flying up 14% in a market that was free falling.
Inside Bars work best in low float stocks.
Fun For Traders: Two Stocks for Learners1) Bajaj Finance has managed to wriggle out from the lows made in October. In my previous post I assumed that the higher lows may cause structural transformation in the stock and it may rally towards 2580. I also mentioned that closing above 2600 can take it back to 2650, 2760 and 2870. The stock has rallied 9% since 18th November post. Read for details in the following post.
The rally has not been that enthusiastic but so far it has been controlled, taking support near traditional moving averages. On longer tern charts the stock has been running towards a significant resistance zone.
On smaller timeframes stock has managed to sustain above the 2625 supply zone. It would be interesting to see how the stock reacts near 2670-2680. Above this level target would be 2750-2760.
2) IBulHsg The stock has been silent for the last two days. I expect some action after this silent consolidation. I am interested in upward expansion. If it expands upwards it may face resistance near 875-880 zone. If stock sustains above this level, one may look for psych. 900, 927 and then 975 levels.
Any weakness near 880 zone may attract fresh shorts.
It would be interesting to see the kind of expansion after this brief consolidation.
Hope some traders would gather a bit of knowledge from this post.
Do like for better posts.
Regards
JJ
Rain Industries: Volatility ContractionAnother interesting chart this one. Stock is in a major uptrend. It has been consolidating off-late and the daily price range is contracting steadily. Looks like price is coiling before a big breakout move.
Have this in your watchlist.
