Top 20 Charts of Bharat-India- Hindustan
Bharat Petroleum --> BPCL -->
Bharat Dynamics--> BDL-->
Bharat Electronics--> BEL-->
Bharat Heavy Elecrical Ltd--> BHEL -->
Bharat Earth Movers ltd--> BEML -->
Bharat Forge-->
Bharat Gears-->
India Cement-->
Indian Hotels-->
Indian Rail Catering & Tourism Company--> IRCTC -->
Indian Energy Exchange--> IEX -->
Indian Tobacco Company--> ITC -->
Indian Bank-->
Hindustan Unilever-->
Hindustan Zinc-->
Hindustan Aeronautics Ltd-->
Hindustan Petroleum -->
Hindustan Copper-->
Read Gandhiji's Quotes for Traders here-->
Community ideas
RVNL, don't miss this super setup, must check.Hello traders,
RVNL is near to 14 month old consolidation breakout, don't miss this railway stock.
all the details are mentioned in the chart.
don't forget to like and share. it motivates me to post more super setups like this.
below setups in related ideas are those which we caught move as big as 120%.
check my other ideas to get to know about all the successful trades based on price action.
Thanks,
Aniket.
keep learning and keep earning.
How to find a BREAKOUT that has a high probability of success?The probability of a breakout getting failed is much higher than it's success rate.(A STOCK AT REST TRIES TO BE AT REST AND THE ONE IN MOTION TRIES TO BE IN MOTION like NEWTON's First Law Of Motion)
But breakout trades are the most rewarding trades in stock market.
So...if there was a method to find out a high probable successful breakout then it would have been a shade better to make money in the stock market.
Here I am with a tried and tested strategy to differentiate a fake breakout and a successful one: FOLLOW the below steps:
1.Choose a stock from an up-trending sector (At present sectors like ENERGY, PSUs, REALTY, FINANCIALS AND AUTO (Just started) are examples of up-trending sectors).
The reason for choosing a sector which is up-trending is that the liquidity is high in those sectors and thus increases the chance of the breakout by one shade.
2.The stock should be above 50 week EMA and above 200 EMA on a daily time frame and RSI should be above 60 (In daily time frame)
This is the reason why HEROMOTOCORP Trade is struggling a lot as it is below EMA 200.
3.The stock should breakout from a consolidation of STAGE 1 structure.
And if the stock is in prior uptrend followed by a consolidation and then a breakout again increases the chances like the recent one in RELAXO FOOTWEARS.
4.If the stock breaks out of multiple patterns like INVERTED HEAD AND SHOULDERS,TRIANGLE,STAGE,PARALLEL CHANNEL,TRENDLINE(The more the number of patterns being broken the better the breakout is) One example of this is TRIVENI ENGINEERING Trade that I shared
5.The breakout should be backed with high volumes (AT LEAST EXCEEDING 20 MA)
6.The closing of the breakout should be strong (NO long wicks)
One more example I have is of INDIAMART Trade that I shared applying most of the concepts discussed above.
NOTE: The above discussed method only increases the probability of a breakout to be successful as no strategy in the market gives 100% successful trades, so managing the risk is as important as the strategy and I will post a tutorial soon for this also.
FOLLOW me to stay updated as soon as I upload it here.
Till then,
HAPPY TRADING :)
Indicator Free Analysis using Simple Price Action - A Case StudyThis is the monthly chart of BATA India. In this we can see that there was a bull run from December 2016 to March 2020. It came down slowly to form a falling wedge pattern and also a double bottom pattern from Mar 2020 to June 2021. It gave a good breakout of the falling wedge or flag pattern in July 2021 and the momentum continued.
Here we have not used any indicators and are simply following price action. According to the price action, a big resistance is at 1800 levels where the stock may halt before giving breakout.
How to trade the stock?
1. After getting a confirmation that the stock has broken out of a bullish flag pattern, we could have taken a trade at 1600 levels with a SL of 1200 and a target of 2200-2400
2. At present too, we can buy the stock between the levels of 1700-1800 with the same SL of 1200 and a target of 2400.
How was the target calculated?
The total distance covered by from the highest point of the flag ( approx rs 1800) to the lowest point of the flag (approx Rs 1200) should be calculated i.e. Rs 600. Now on giving breakout, the stock should ideally move Rs 600 from the highest point of the flag (Rs 1800). Thus the long term target comes out to be Rs 2400. However it is just a prediction. So one should give or take a standard +/- 5% deviation from the predicted target.
PS - This stock has been chosen for only an ideal case study. This is not a recommendation. The stock may or may not perform as predicted or described.
WaveTalks: Nifty-Can Bulls Bounce Back?- The Irregular Triangle 6th / 7th Oct2021
The index topped at 17882 this morning was a perfect behavior for the last leg downside in an irregular triangle updated in TradingView Author status / Last idea (add on comment).
6th Oct2021 – WaveTalks: Nifty-Irregular Triangle: ( Stops Above 17890 )
Irregular structures are those which is surpassed in the next leg as it happened for Index Nifty starting 17th Sep2021.
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Let us take a flashback tour for Index Nifty starting 17th Sep2021.
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Wave A or 1st Leg / Wave Downside- Starting at highs of 17792 on 17th Sep2021 (17792 to 17326 = 466 Points drop)
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Considering 17792 High on 17th Sep2021, as the start of the structure, slipped to 17326 as 1st leg downside & pushed upside in 2nd leg to new all-time highs of 17948 (From 17326 to 17948).
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Wave B or 2nd Leg / Wave Upside (17326 to 17948 = 622 Points Upside Rally)
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2nd leg crossed 17792 highs & made a new high at 17948 giving us 1st clue that some irregular structure could be unfolding next as all the moves so far from 17th Sep2021 was corrective in nature which was running across my mind at that moment.
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Wave C or 3rd Leg / Wave downside (17948 to 17452 = 496 Points drop)
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The fall from 17948 highs to 17452 was again corrective in nature. This time I became 100% sure that it is a 75-80% chance that Triangle could be unfolding next & I started putting my sleeves up in excitement as I could be getting 2 legs back to back if identified correctly.
This is all I was thinking like a trader.
The market pushed upside right from the zone 17450-17475 buying zone suggested as PRZ (Potential Reversal Zone) in the idea published to the TradingView community on 1st Oct2021 - Bullish Gartley
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Wave D or 4th Leg / Wave Upside (17452 to 17882 = 430 Points Upside Rally)
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This 4th Leg had to stop below 17948 Highs if the structure had to be correct as crossing above 17948 – this whole triangle scenario could have gone for a toss as structure invalidates.
Keeping that in the mind, I quickly updated all the followers in the last idea this morning before the market starts selling below zone 17800-17825 which was an important zone. I agree it was choppy as markets will never give you straight or easy moves & especially when the triangle is unfolding.
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Wave E or 5th Leg / Wave Downside (17882 to 17617 = 269 Points drop)
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This wave was choppy at the start but it was all controlled by the bears till the end of the day when Nifty made low @ 17613 & closed at 17646 @ 6th Oct2021
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Few things to note
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Our Final Target 17550-17575 is not completed so be careful as the Index may slip to these levels & take support of the Trendline rising upside connecting Wave- A(Bottom-17326) & Wave-C (Bottom- 17452) respectively.
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What Next?
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As a trader, we want to know what next. So here it is. When Triangle gets completed which is assumed to be sideways correction in the uptrend suggests that the next wave can be upside in an explosive manner which is seen or observed as a Thrust. In current scenario, thrust is expected upside for new highs or similar highs of 17948
So, Holding Levels 17452 which is Wave C – Bottom & 17326 which is Wave A – Bottom are key & critical level of support.
Till the time key & critical support holds we expect Bulls to come back & take the control or be in the driver’s seat next.
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Target Next
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Upside Nifty Index is open to travel minimum 17948 Highs & crossing above it will easily travel 18000+ A New All Time High.
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Note
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Always be careful at the tops as euphoria or crazy moves may put a trader in complacent zone & we forget all about risk management. Historically, It has been observed that crazy upside moves are followed immediately by opposite downside move which can be even bigger in size if happens.
SECRETS OF A FAKEOUTThe markets were/are in a state of frenzy. Any strategy with a long bias would have had a positive expectancy, even the ones that don't have an edge. It is vital for traders to build good habits because bull runs don't continue forever. Right now, you can buy the highs and still get away with it because the market is flush with liquidity and inexperienced, new coming investors. When this euphoria will die down, one has to understand the difference between real trading and jumping on the bandwagon. This tutorial is an attempt to de-mystify a simple classical chart pattern combined with statistically tested indicators and tools. Hope this helps.
Here are some examples of a bad breakout:
1.
2.
3.
I also have a scanner that I use to scan very tight compressions beforehand. This is what my current list looks like:
How to identify a multibagger stock?Ways to identifty a multibagger and a good stock for positional trade:
The stock should fulfill the following criteria
1.It should be from a booming sector and the broader index should be uptrending
2.The relative strength of the stock to Nifty 50 should be in uptrend
3.RSI should be above 40
4.The stock should be in a stage 2 uptrend structure (breakout with good volumes + consolidation --> breakout with good volumes as shown in the structure of sun pharma)
5.The stock should have low volume consolidation.
Many more examples are there from the realty sector and few from the financial sector and I will be uploading them very soon FOLLOW me to get notified when i upload a new idea
Till then,
Happy Trading :)
Part [A] Basic of Wave Principle
Elliott Wave background
In the 1930s, R.N Elliott identified the price of the stock trends and reversed a specific pattern. This pattern is repetitive in form and, the patterns have predictive value. He decided to use this pattern (Elliott wave theory) to predict the market. The Elliott wave is not primarily a trading system. It is a detailed description of how the market acts. The Elliott wave is part of technical analysis. Also, the Wave principle is the reassembled form of dow theory.
-Elliott Wave Principle The key To Market Behavior]
Waves in the market?
We all know that price never moves in a straight line. It will neither fall in a straight line nor rise in a straight line.
Price will create highs and lows. And this high and low creates waves. Elliott wave theory is all about counting waves and, we are going to use the Elliott wave to trade the market.
Now, the concept of waves is acceptable for you.
Elliott wave theory is made of 5+3= 8 waves.
Let me show you that structure in both trends.
In bull market ( UP Trend ) :
Figure 1.1 This is the Elliott wave structure in an uptrend. As we discussed, Elliott's wave theory is made up of 5+3=8 waves. Where five waves move with the trend and three waves move against the trend.
In Bear market (downTrend) :
Figure 1.2 This is an example of Elliott wave theory in the Bear market. We can see that five waves move with the trend and, three waves move against the trend.
Take a deep breath, I know you have lots of doubts in your mind. Let me solve some.
1. Elliott wave theory works in any time frame.
2. These 5+3=8 waves will give us a market edge. It will provide strong trends & trend reversals.
3. The accuracy of Elliott wave theory is 84% of you are using the wave principle correctly.
Practical Example of Elliott wave theory :
In the Bull market :
Figure 1.3 This is the TATA MOTORS 4 hour timeframe chart. I used bar charts because It is easy to recognize Elliott's waves in bar Patterns. Well, it works for me to recognize if you feel that you can recognize patterns in another chart, go ahead with bar charts!
In Bear Market:
Figure 1.4 : This is the ITC daily time frame chart. It shows the beautiful Elliott wave structure in the Bear market.
Elliott wave structure :
Now, we all know that Elliott is made of a 5+3= 8 wave structure. So, Let's start getting into it!
To understand the wave principle, we have divided the wave structure (5+3=8) into two Phases which are an Impulse phase/structure & a corrective phase/structure.
Figure 1.5 This picture illustrates Two phases of the Elliott wave principle.
The impulse phase is made up of 5 waves and, the corrective phase is made up of 3 waves.
Figure 1.6: This picture divides the wave principle into two phases.
1. Impulse phase/structure ( which includes five waves and, which moves with the trend you can see in bull market impulse phase is going upward and in a bear market, impulse phase is going down which is directional move.)
&
2. Corrective Phase/structure ( which includes three waves and which moves against the trend, you can see that in bull market corrective phase is going downward and
In bear markets, the corrective phase is going upward, which is a counter-trend move.
Figure 1.7 , Elliott wave has 2 phases. motive/Impulse phase ( directional move ) and corrective phase(counter trend move). We can divide these 2 phases into two types of waves. Impulsive waves and corrective waves.
Let’s zoom in on the impulse phase to understand the underlying structure and wave behavior.
Motive/Impulse Phase :
Important things about the impulse phase
1). Motive/Impulse phase is a Five wave structure that includes wave1,2,3,4 & 5.
2). motive/Impulse phase is a directional move ( moves with the trend.)
3). The Ending point of the impulse phase is the starting point of the corrective phase.
4). motive/Impulse structure is powerful than corrective structure.
5) Impulse phase can divide into two types of waves
i) Impulse waves: 1, 3,5 ( move with Trend of impulse Phase )
ii) Corrective waves: 2,4 ( Moves against the trend of Impulsive Phase)
Let me give you a quick understanding because we are going to cover these waves in-depth,
Impulsive waves are trend-following moves. We can find this type of wave structure in both phases. Impulsive waves create trends.Impulsive waves are (1,3,5,A,C)
Corrective waves are counter-Trend moves. We can find this type of wave structure in both phases. Corrective waves provide pause to continue the trend,
Corrective waves : (2,4,B)
Motive/Impulse Phase in Bull market
Figure 1.8(A) , wave 1,3,5 is an impulsive wave of impulse phase because The trend of impulse phase up and, Impulsive wave are following the trend and heaving upward move.
And
wave 2,4 is the corrective wave of an impulse phase because the trend of the impulse phase is up but, the corrective wave is moving down, which is against the trend.
Motive/Impulse Phase in Bear Market :
Figure 1.8(B), wave 1,3,5 is an impulsive wave of impulse phase because the trend of Motive/impulse phase down and Impulsive wave are following trend and heaving downward move.
And
Wave 2,4 is the corrective wave of an impulse phase because the trend of the Impulse phase is down but, the corrective wave is moving upward, which is against the trend.
Corrective Phase/structure :
Important things about the impulse phase
1). The Corrective Phase is a three-wave structure that includes waves A, B, C.
2). The corrective phase is a counter-trend move ( moves against the trend.)
3). The Ending point of the corrective phase is the starting point of the Impulse phase.
4) correction phase can divide into two types of waves
i) Impulse waves: A, C ( move with Trend of correction Phase )
ii) corrective waves: B ( moves against Trend of correction Phase )
Corrective Phase in a bull market:
Figure 1.9(A ): wave A, C is the impulsive wave of the Correction phase because the trend of the correction phase is down and Impulsive waves are following the trend and heaving downward move.
And
Wave B is the corrective wave of a Correction phase because the trend of the Corrective Phase is down but, the corrective wave is moving upward which is against the trend.
Correction phase in Bear Market :
Figure 1.9(B) : wave A, C is the impulsive wave of the Correction phase because the trend of correction phase Up and Impulsive waves are following the trend and heaving Upward move.
And
Wave B is the corrective wave of a Correction phase because the trend of the Corrective Phase is Up but, the corrective wave is moving down, which is against the trend.
[ Note : here, the correction phase moves against the trend. That's why the market has a Downtrend but, the correction phase is in an uptrend.]
Impulsive wave structure :
1. Impulsive waves are directional moves that are bigger than corrective waves.
2. Impulsive waves create trends.
3. Impulsive waves are subdivided into five waves.
( that means wave 1,3,5, A, C which moves with the trend will have five sub-waves.)
4. Impulsive waves are easy to recognize.
(Impulsive waves can also be called motive waves)
5. Ride of impulsive wave can give us a high probability trade setup with high Rewards
We are going to cover impulsive wave formations in the next part.
(diagonals,extensions,Impulse,Truncation)
Figure 1.10: As we discussed, Impulsive waves subdivide into five waves.
Here wave 1,3,5, A, C has five subwaves which you can see in the chart.
Similar expressions of Elliott Wave structure on NIFTY.Elliott Wave Methodical Structure
This is a motive cycle of the Elliott Wave in which you can observe waves 1,3 and 5 are in direction of a trend. Wave 2 and 4 are against the direction which is called a "Corrective Wave".
Five-wave structures, numbered (1)-(5).
In the direction of the main trend of one larger degree.
Wave 2 cannot retrace at the starting point of wave 1
Wave 3 can never be the shortest.
Wave 4 never enters the price territory of wave 1.
Waves 1, 3, and 5 are motive waves.
Wave 3 is always an impulse wave.
I've also tagged some common words such as " steep jump ", " sideway/consolidation ", " pull back " etc. So, a reader can understand it easily. The design of the chart is very easy to understand therefore, I have posted the below charts to understand the easy structure of the Elliott Wave.
Now just check out NIFTY 50, Elliott Wave Structure, and Real Price in the below chart.
Elliott Wave with Actual Price
Yes, you got it now. Did you notice my entry-level at wave 2 on Aug 25, 2021? I have also published this chart on tradingivew.com. Check out the below chart.
----------------------REALIST-----------------------
Aug 25, 2021, published : (Entered with my position at the end of Wave 2)
Just, click on the "PLAY" button . I hope you understand now about Wave Counting.
Last updated on Sep 16, 2021 (Started 4rth corrective wave)
If you've still query about Elliott Wave, please comment.
How To Use Financial Ratios To Make Better DecisionsFinancial Ratios help you evaluate a company. Most financial ratios will show you how much money you're paying for a specific piece of the business. Let us give a few examples:
Price-to-Sales Ratio = Market Cap / Sales
The Price-To-Sales ratio or PS ratio tells you how expensive a company is relative to its total sales. The formula is calculated in two different ways: divide the company's market capitalization by its revenue or divide the current stock price by revenue-per-share. Because this ratio is being calculated with live price information, you can also watch it in real-time on the chart as we've shown in this example above.
If a company has a market cap of $10 billion and revenue of $1 billion, well that, that implies a PS ratio of 10. You're paying $10 for every $1 in sales. You can do ratios like this for all aspects of the company. For example, PE ratio or Price-To-Earnings ratio measures the Market Cap / Earnings . This tells you how much you're paying for every dollar of earnings .
Keep in mind that Financial Ratios are not perfect. They are also not a buy or sell recommendation. Instead they are shortcuts, ways to quickly evaluate a company, compare its underlying fundamentals, and study that company relative to other companies. You also must remember that financial metrics can change quickly with a single earnings report. A company's future expectations are also just as important. A company like Apple might have a high PE ratio, but if they're building and growing revenue into the future, their PR ratio could come down over time.
Remember, Financial Ratios and Financial metrics in general paint a picture of the underlying business and its earnings potential. Here are some other resources to get you started:
1. Read more about Financials on TradingView in our Help Center.
2. You can also code your own strategy or indicator using this financial information .
3. We've also created a library in our Help Center so you can learn more about every Financial metric .
Here are some other financial ratios that you may find interesting and how they're calculated:
PE Ratio = Market Cap / Earnings
PB Ratio = Market Cap / Book
PEG Ratio = PE / Earnings Growth
Quick Ratio = (Cash + Cash Equivalents + Current Receivables + Short Term Investments) / Current Liabilities
Dividend Yield = Dividends Per Share / Price
EV Multiple = Enterprise Value / EBITDA
To access all of the Financial Ratios available to you, click the Financials button at the top of your chart. From here, you can select many different Financial metrics and study markets at a deeper level.
More importantly, you can combine the study of Technical and Fundamental analysis at the same time. Meaning you can evaluate the fundamental side of the business including its earnings and valuation while ALSO studying price action and planning a trade.
Please feel free to share your feedback and comments below! Thank you for reading.
What is Ascending Triangle?What is an Ascending Triangle Pattern?
Ascending Triangle Pattern is a continuation pattern that means when it plays out it will continue the preceding trend. It is created by price moves that allow for an upper horizontal line to be drawn along the swing highs, and a lower rising trendline to be drawn along the swing lows. These two lines form an ascending triangle . Traders here usually watch for breakouts from upper resistance in ascending triangle patterns.
How does the Ascending Triangle Pattern work?
After the prior uptrend when investors try to book profits it creates a resistance that leads to a high supply zone . But due to the prior uptrend investors are still interested in the asset which leads to picking up in demand slowly, resulting in a rising trendline. Time in this phase is also a crucial element. The longer this pattern consolidates, the more chances it has to give a possible breakout to continue the uptrend.
Why is the Ascending Triangle Pattern Unique?
Ascending triangle patterns usually have a higher breakout success rate than symmetrical triangle patterns. In an ascending triangle , higher lows are constantly being built, which shows there is a strong demand for the asset.
Role of Volume:
Volume plays a major role in the completion of all major patterns. The horizontal trendline which acts as resistance can give spikes in volume . We will call it a breakout when a candle closes above horizontal resistance level with a great volume spike or rise in average volume .
Above Chart Explanation:
This is the 4H chart of FTTUSDT with a clear preceding upward trend. After the uptrend, we enter the second phase where the upper horizontal line becomes resistance 4 times in a row and the lower rising trendline becomes support 3 times in a row. As we have observed here FTTUSDT consolidated for nearly 1 month in an ascending triangle pattern, which finally led to a super bullish breakout.
Two Possible Entries:
Entry 1: On rising support, when the price touches the rising support trendline and if there is rising average volume , it makes a good entry with a stop loss placed below the previous higher low point.
Entry 2: On resistance breakout, we should wait for the 4H candle to close above the resistance to confirm the breakout’s validity. Once the breakout is valid, a potential opportunity would be to enter at the close of the 4H candle with a stop loss placed a little below the breakout level. Usually, we should target the height of the triangle after the breakout.
Comment down your thoughts on Ascending Triangle Pattern in the comment section.
Disclaimer:
This is just an educational post. Never trade just any pattern. And please do your research before making any trades.
Happy Trading!
PS we are posting this again for our Indian Audience.
How To Tweet a Chart Image Fast!We realize that sometimes you just want to get your charts out to people as soon as possible.
With the Tweet Chart Image feature, now you can!
As illustrated above, simply choose "Publish" then "Tweet Chart Image" and you'll be able to tweet the image out directly from your Twitter account to get that critical analysis to your followers fast!
What's that? You'd like to do this on your iPhone as well?
No problem, we got you.
Check out what idea users are tweeting right now here
Image Credit
How to count Neo wave Impulse Current wave counts
Primary-wave 2 (orange)
Intermediate-wave A (Blue)
Minot-wave B (Red)
Minute-wave C (Yellow)
Applied Neo wave Impulse Rules:
1)Counting started from faster retraced low
2)wave 2 should not retrace wave 1 by more then 61.8%
3)wave 2 should be equal or longer then wave 1 in terms of time
4)0-2 TL should be clean and price action of 1 should not touch 0-2 TL
5)wave 3 should not be shortest
6)wave 4 should not enter wave 2 zone
7)2-4 channel should not have more then 4 touch point,here on 5th instance channel was broken
8)wave 4 should be longer then wave 3 in terms of time
9)Atleast 1 Alternation between intermediate wave 2 and 4 should be there,here alternation is observed in terms of retracement,pattern complexity,time and price
10)Every new motive wave had 2 stage confirmation.
Analysis
Looks like Tata steel is certainly not in buying zone,as it has completed intermediate impulse cycle and it has broken minute 2-4 TL,minor 2-4 TL(not shown in the charts),minute 4 low's in lesser time then minute 5 took to form and 21 day simple moving average.
A decisive close below 1400 can trigger fresh selling till 1240-1250 where previous price action zone comes along with 23.6% retracement of entire intermediate cycle from 365-1535.Hence short selling can be done if price goes below 1410 with a stop loss of 1460 on the upside and target of 1250 and 1140.
Continuing to this logic meanwhile during this fall if price's comes to 1250 level then it will be breaking intermediate 2-4 TL in lesser time then intermediate 5 took to form hence it can be assumed that intermediate top has been formed and going ahead price can even touch 1140 minor 4 lows and 709 intermediate 4 lows(I know it sounds ridiculous at this point) but i am mentioning this becoz it seems like we have completed intermediate impulse cycle.
As of now metals stocks are not participating in the on going rally so keep your exposure limited as in case of any major selling portfolio returns would be severely impacted if metals occupies major chunk of your portfolio.One can even start hedging by selling in the money call or of tata steel keeping mentioned spot price as stop-loss.Further Indicator's and Candle stick patterns can be used for efficient entry and exits.
PS: Interesting observation skip if you are already boared
1)As per the rules 5th(minute) extention of 5th(Minor) extention of 5th(Intermediate) wave cannot take corrective form unless 1st of highest degree 5th is sub-divided in 3.This is seen in this case.It was confusing me at first that Minor 5th is making terminal impulse by looking at the overall shape i got by connecting TL's but as Minor 1st of Intermediate 5 is not sub-divided in 3 this possiblity can be ruled out,also here Minute 4 has not entered Minute 2 pricezone which confirms termination of Minute,Minor and Intermediate 5th wave @ the shown place as per my view.
2)Both variation of Neo wave pattern Diametric pattern is seen,
Diamond Diametric-Intermediate wave 4
Bow-Tie Diametric-Minor wave 4
3)As mentioned by many Author's of wave theory and as noted historically wave 5 in commodities are longest.Here wave 5 is longest in terms of both price and time .
I have tried showing everything that i have charted hope-fully anyone reading this finds this post logical just like me
Part 1: How to Count Waves Using Chart Patterns?We can count waves using traditional patterns like Head and shoulders, Double Top and Bottom,
Triangle, cup & handle, etc. This article is about how you can count waves by identifying chart patterns.
I have covered Three chart patterns in this article,
1) Triangles
2) Head and shoulders
3) Double Top and Bottom
1) Head and shoulders :
In addition, the two lows formed when the price failed to rise and fell back down were basically at the same level. The horizontal line is often referred to as the "neckline" When the price fails to fall back for the third time neckline will break. So "head and shoulders" was officially established.
Changes in volume with head and shoulders:
During the formation of "head and shoulders", the left shoulder has the largest volume, the Head has a slightly smaller volume, and the right shoulder has the smallest volume. The phenomenon of diminishing trading volume shows that when the stock price rises, the chasing force is getting weaker and weaker, and the price has the meaning of rising to the end.
Operation plan after the Head and shoulders appear:
When the head and shoulders formed, you can decisively follow up the short order. The formation of the head and shoulders indicates the beginning of a new round of decline in the market, and the minimum drop is the distance from the head to the neckline. The profit is very substantial. Therefore, studying the formation of the Head and Shoulders is also a necessary analysis process for band enthusiasts.
Wave Count :
The left shoulder: wave 3/A.
The first touch on the neckline: wave 4/B
Head: wave 5/C
The second touch on the neckline: wave A/1
The right shoulder: wave B/2
The ending point of the right shoulder: wave C/3
2) Triangles :
These are the most commonly used triangle patterns. In this motion, we are going to understand the triangle in terms of the Elliot wave. We'll be talking about the classical triangle pattern in an upcoming educational series.
Wave Count :
A triangle forms in corrective waves. There are Four corrective waves in Elliott wave theory. The corrective waves are 2,4, B, and X.
There are four waves in a triangle which are A, B, C, D, E.
The starting point of wave A of the triangle is the ending point of impulsive wave 1/3/A/W. After the completion of wave E of wave 1/3/A/W, the Impulsive wave will initiate.
3) Double Tops and Bottom:
In the chart, you can sometimes see the stock price fluctuations. The stock price fell back after reaching the highest price. After some sorting, it rose again to near the previous stock price level and then fell back. Two "normally highs" The high point is formed on the circuit diagram and will not be seen again in the short term.
Wave Count :
In a Bull market, The first Top of the pattern represents the completion of the impulsive wave. The ending point of the Impulsive wave is the starting point of the corrective wave.
I started the wave count from the first Top and labeled it as A, B, and C waves.
In a Bear Market, The first Bottom of the pattern represents the completion of the impulsive wave. The ending point of the Impulsive wave is the starting point of the corrective wave.
I started the wave count from the first Bottom and labeled it as A, B, and C waves.
After wave C is complete, we can ride the impulsive waves.
Identifying Set Ups - Price Action + MACD + EMAToggling between numerous stocks can be tiresome. Using a strategic method to identify potential set ups can save your time and deliver amazing results!
In the above chart,
I first noticed that the price was around its support. It can be confirmed by seeing the previous price swings that the support is well tested.
Next I look at the MACD to confirm if the divergence between the Signal Line and MACD line is decreasing to make sure if it is the right time to enter or not.
Usually these 2 steps take hardly a few seconds and I can form a preliminary idea about the position.
Once these two points are confirmed,
I move forward to confirm if the EMA 9,21 (which can been seen has worked out beautifully for this stock in the short time frames like 7-10 days) is actually looking bullish to enter right now. If the EMA is not already crossed, or about to cross, I can drop the share here. In this case, the EMA lines are very close and the chances of a bullish cross are good enough.
Next, I confirm my hunch by looking at the Volume data and see if the increase is price will actually be sustained by smart money flow, or fall down by retail trading pressures. Increasing volume with price increase helps to get conviction for a long position.
Finally, I check the RSI levels and I monitor them very closely to see if there is any Bullish or Hiden divergence and see how strong they might be. I also like to draw a vertical line at the key level from which RSI always bounces or retracts. Personally I prefer RSI levels between 50 and 60, after a recovery from 30-40. It just implies that the bulls are gaining control again and still leaves out plenty of room for entering a trade and making profits before it hits the overbought region.
After I am satisfied with the Technicals, the last thing remains is to check if there are any major news, events or rumours about the share and the recent EPS growth of the share. This doesnt affect a lot in the short run, but doing due diligence never hurts. It is how I identified IEX, HUL and TCS just right before they shot up.
Thanks for reading!
Keep Learning :)
How to identify Breakout - Price ActionFor the purpose of demonstrating how one can identify a trend change using Support - Resistance and Price Action, I have taken the daily chart of IEX. I had also identified and posted about it before the recent rally.
The first step is to establish a clear support and resistance line. In case of a breakout, I like to keep my target at around the same price difference range between old support and old resistance after it bounces from the resistance.
The crucial thing lies in identifying the candlestick pattern around the support - resistance. In our case, when the price first hit the resistance, it formed a clear Bearish Engulfing and the next time, it formed a healthy dark cloud cover followed by an engulfing. These are clear red flags when a trader should start booking profits.
Similair bullish patterns can be identified at support region like the Morning Star pattern as in the above chart.
In order for the price to give a breakout, Volume & Momentum play a very crucial role. A rising volume with price rise builds momentum, and increases the chances of a breakout. Another important observation is to see HOW STRONG did the PRICE BOUNCE from the support. Long wicks, very less or almost no consolidation around the support and a bounce back from an area above the support instead of retracing all the way back to the support are clear indications of trend reversal from Bearish to Bullish.
Also notice how the candle formed a Morning Star during the bounce, this further strengthens our conviction that the trend is changing.
Observe how the red candles grow smaller and smaller as they approach support, this indicates weakening of the bearish momentum.
Also the Resistance was approached in a very aggressive foray this time with clear long green candles indicating a very strong pent up demand.
I hope this analysis provides some insight into how the Price action gives an early indication of the future price movement.
Thanks for reading! Keep Learning :)
How multiple confirmation can lead to a high probability setup!The stock has been trading in the range for past 200+ days and has started to show the signs of strength and these are:
1. A quick bounce from the support taking out the short term resistance of 1070.
2. Volumes have stated to increase showing the bullish sentiment among buyers.
3. The gap between 21-day and 50-day EMA has been reducing.
Why this time the breakout can be successful?
1. Resistance has become week as being tested multiple times.
2. A rapid recovery from the lows that too with large volumes.
3. By the time the stock reaches resistance EMA may complete the crossover which further adds odds in our favour.
Possible Scenerios during a breakout:
Scenerio No. 1. Break and retest: Here, in this scenerio stock does not wait near the resistance rather quickly takes out the resistance and comes back for the retest and when it breaks the High of the BO or alert candle a buy SL-M shall be waiting for your entry into the stock and SL shall be placed just below the recent low the stock has established.
Scenerio No. 2. Halt near the resistance: In this case the stock may conslidate near the resistance for a few days in a very tight range, which is a typical case of high reward low risk strategy. Here entry can be made as soon as the stock crosses the narrow consolidation near the resistance and the SL just under the same narrow range shall be placed.
