ITC-Back to pavilion like Team India in T20 or Follow 2-3-5 RuleITC
- the performance of ITC is similar to the performance of Team India in T20 World Cup... Abysmal
- however if we look at it from Chart perspective, we see the stock following the 2-3-5 Rule
So what is the 2-3-5 Rule?
- It takes 2 point to establish a trend line
- Point 3 is your best bet to initiate a trade ( in this case, at 265 since the stock came near Line of Resistance for the 3rd time the trade was on the short side)
- It is the 5th attempt, when one should not mess with. The probability of trendline getting weaker is higher and possibility of a breakout is stronger.
Diagnosing the charts further, we observe, the stock is near the Line of Support for the 3rd time and on any further dips Risk::reward ratio would look more and more favorable to go Long
Target 236 / 245 / 251 / 262
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Here are a few examples of charts where the 2-3-5 Rule helped us capture the best movements
Adani Power From 45 to 154
Adani Power profit booking above 154
ONGC From 133 to 169 in quick time
Short term targets achieved and profit booking duly recommended at 157 / 169
Limitations : Like any other study, this too has it's own limitations
- there is no guarantee this will work all the time
- the 2-3-5 Rule may contradict with the Cup & Handle pattern in which breakout is expected on the 3rd attempt itself
- I have used this study mostly on longer time frame charts Weekly and daily charts and haven't observed the same adequately on 5 mins or 15 mins charts. So can't comment for those time frames
This Diwali, my advice is
- to take the learnings, invest some time in your studies
- observe for yourself on different time horizons and different stock charts
- and be in a better position to take investment / trading decision with better knowledge.
This approach will work far better for you in the longer run than what advice we see in Media ads with related to investments these days
- It's Okay if you are irresponsible and broke your TV, 2nd income from stock market is there
- ghusta nahi kuch khopdi mein ( don't understand a thing about investment) yet invest without knowledge in the Hope Kuch toh badlega (something will change... yeah things can change from bad to worse).
- Boss ka presentation gaya bhaad mein... ( I mean seriously.... how can one reflect disrespect towards your work and carelessness as cool attitude)
A little bit of fun element is fine but to the point of being reckless and irresponsible.... That's not the attitude which which you want to come to market... and with your money and your Future goals at stake.... I am sure, that's certainly not the habit you would want to develop.
Remember, whatever work you do, be ready to give 120% of your efforts and output . Do justice to your work 🙏
When it comes to investments and trading, it's your money and your Future... always and always treat it wisely
Trust you find the inputs useful.
Do Like and feel free to share your views in the comment section below.
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Wishing you all a very happy Diwali...!!!🙂
Disclaimer
- The view expressed here is my personal view
- Past performance is not a guarantee for future predictions
- Use this for educational purpose
- Any decision you take, you need to take responsibility for the same
- It's your hard earned money. Treat it wisely
- Trade / Invest keeping in mind your trading style, goals and objectives, time horizon & risk tolerance
- if trading in F&O, understand that F&O trading involves risk
- Do take proper risk management measures
- Do your own analysis and consult your financial adviser if need be
