RELIANCE, ACCUMULATION, PRICE-ACTION-VOLUME-PROFILEDisclaimer-:
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
OBSERVATIONS
Reliance has always been rising. But recently since Sept 2020 we have seen a consolidation between 1800 and 2400 levels.
Now as the volume profile suggests the recent volume is almost the same as the previous accumulation when NSE:RELIANCE started rising. (Regions are marked in violet boxes)
So it could be either accumulation or distribution. But I bet its accumulation because of more buying(green) volume than selling volume and it has recently given a triangular breakout with huge volume.
So if this is accumulation then a confirmatory breakout above 2400/2369 level will continue the uptrend even better than the previous one, because we have more accumulation now than before.
So waiting for a breakout above 2400 level will be less risky and more profitable. I will update here when that happens
TARGET WITH LOGIC
Several Accumulations have happened since the uptrend started.
So since the current volume is comparable to the previous accumulation region it makes sense to assume that the trend continuation will be longer than what happened since then.
That is more the accumulation, greater the strength, so the more the move.
So I used a Fib Extension from that level till now and chose a 168% as target.
But this target is above all-time-high so its a provisional target level.
Entry
Confirmatory breakout above 2400 level in 1D timeframe or as per your strategy. But confirmatory breakout above the important and psychological 2400 level is less risky.
Stop-loss
Since 1850 is a nice support levels (support in the rectangular region, tested multiple times) so i would prefer the stop-loss around that level. Since our target is high enough, a conservative stop-loss will be better to avoid being stopped out unnecessarily.
EXIT
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 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
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**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.
NSE:RELIANCE
