Institutional money - Volume speaks a lot!Apl Apollo is one of the leading companies in Indian Steel sector.
I had some previous posts on it as well, which played out well for me.
The key aspect is to put urself in those big shoes and think like an Institution.
The key problem if you are an institution and want to buy a sizeable portion in a share is LIQUIDITY.
How will you get enough sellers to buy shares from?
Notice how on 11th Nov at 902 level,
One MF house Sold its position in APL Apollo while another Bought it.
One created Liquidity for the other.
Similarly on 20th December, Two MF houses did the same routine.
To understand how this impacts Volume, we need to understand what VOLUME is!
VOLUME of a day is simply the number of TRADES that took place on that day.
It doesn't mean that there are more buyers or more sellers, simply that N number of buyers and sellers did a trade.
Now MF Houses do this in a very large amount, and this drives up the volume.
If you have been in the market long enough, you would have definitely noticed that
Price tends to return back to the Institutional Buying Level after a short Impulse -
The Retailers usually buy in the rise and then when share prices fall down to original levels, they exit their positions to avoid further losses or simply put, their stop losses get triggered. This creates LIQUIDITY for the Institutions to fill their partial positions at the same price after offloading them to retailers previously at the top.
In this particular case,
There are a number of green flags.
Share Price bounced from EMA 100 - which has been a strong support all along.
RSI 30 - the usual bounce level and MACD Divergence decreasing
Prices are again above EMA 50 which has been a key level in rising trends for this share.
In previous 4 occasions when this happened, the share went on to make a Higher High.
I am expecting some upside here as well.
This is not an Investment Advice. Only for Educational Purposes.
Thanks for reading!
