APLAPOLLO,TRIANGULAR BREAKOUT, PRICE-ACTION,VOLUME-PROFILE 1DDisclaimer -:
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
Firstly
NSE:APLAPOLLO has been rising smoothly for a long while now. In between small accumulations have taken place, marked in violet regions where volume was significant as shown by volume profile. Recently a triangular pattern was spotted with trend lines tested at least 3 times (4). As a result those are strong trend lines and if broken have a nice chance to continue the up-move.
Recent volume inside the triangular region , marked in violet in volume profile is not so high compared to the volume that happened during huge accumulation which confirms that the current region was a pause and not a distribution.
If it were distribution we would have a huge selling volume at least of the previous accumulation magnitude.
TO SUM UP
1. Triangular pattern in 1D timeframe with trendlines tested at least 3 times
2. Previously a nice uptrend
3. Current region is just a pause
4. So continuation of trend expected after the breakout.
TARGET WITH LOGIC
2-3 accumulations have happened since the uptrend started. Regions marked in violet.
So since the current volume is comparable to region between 15Oct-8Dec 2020, it makes sense to assume that the trend continuation will be longer than what happened since then because there has been another accumulation 1Jan-2Mar 2020 after that.
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 1400 level in 1H timeframe or as per your strategy. But confirmatory breakout above the 3 times tested trend-lines is mandatory and less riskier.
Stop-loss
A conservative stop-loss will be better since the triangle is a very narrow one.
Since 1050 is a nice support levels and just above the previous accumulation during 1Jan-2Mar 2020, so i would prefer the stop-loss around that level.
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 1D timeframe, stop-loss can be trailed to a nearby support level .(Like Candle Low)
2. If there is RSI Divergence in 1D timeframe, better to exit at close of 1D since afterwards there can be long consolidation or reversal.
3. If the trailing stop-loss is hit, please exit
Note-: it gave a nice breakout recently in 1H timeframe and has retraced a little. For those who are already in, it seems like breakout was not fake and there is high chance the breakout will continue since the retracement was weak on price action and volume
For those who haven't taken position wait for the next breakout to avoid unnecessary risk.
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NSE:APLAPOLLO
