Charts for the Day

[mindgames]

Dr Reddy one of stock which is in uptrend, not many sign of weakness on weekly, daily but still got punished. The lesson is stoploss are necessary no matter what strong trend company exhibits.

I got stopped out today, with meagre profit after holding for 4-weeks. Post analysis if done, to read what is sign of weakness if any. More prominent point i always focus, i failed to recognize it. Thats bad part of homework i had done on this stock.

So whats the point..?? Remember i always said, volume is important. Closely looking at charts, stock showed great volumes but result of this effort are not producing any substantial price move, thats the warning sign. Such huge volumes should be enough to drive price higher, and to clear resistances, but here it failed to clear resistances. Daily bars of 23rd - 29th - -30th October shown good volumes, infact exceeding highs of previous 10-11 months on daily charts, still it failed to clear resistances...

Its always look good to analyse in hindsight, but why trade failed needs to be analysed. Anyways, lets carry on with the market...

Dear Anil,

How do you analyse volume? I never seem to understand this parameter. For instance I might have considered this as a sign of accumulation by people in the know....

Thanks

 

[anil_s_trivedi]

Dear Anil,

How do you analyse volume? I never seem to understand this parameter. For instance I might have considered this as a sign of accumulation by people in the know....

Thanks

Dear mindgames,

Volume is too important for any breakout trades, or rather for any stock coming out of accumulation.

My reason to watch out for Dr Reddy is same, its going on perfectly till that breakout bar. Like its slowly going sideways with lows volumes, taking its time. But on breakout bar number 1, it just didnt turn up enough volumes, it was less than 50 SMA. Still i am watching it...

Then, on bar 2 it got sold down with volumes greater than bar 1, that was first suspicion sign. On bar 3, it confirmed my view and it showed weakness in trend, with bar closing below lows of that whole october sideways range with volume of that downbar, never seen in while 2015 till october...Such a downbar with that much volume...YOu should be cautious now and to trade a breakout hereafter you need to have tight stoploss...

Then on bar 4, a small range bar with exceptionally high volume greater than bar 3, put me into trouble...this was a good snapback by bulls...but every action needs follow up...but it started lingering lower...

ON bar 5, 6 it tried to chase failed breakout high with volume but didnt succeed...

So on bar 5, 6 thereafter i am expecting a result...as lot of efforts have been put by bulls at bar number 4 ,5 ,6...and if its a accumulation bulls will mark prices higher...but it failed even to touch 4386 levels high of breakout bar...

So, much of my focus was on effort vs result...if its not producing result for the efforts then something is cooking in it...

 

[anil_s_trivedi]

Anil Sir,

if your time permits..
BPCL / PETRONET / ONGC can you analyse?

Dear nitinji,

Sorry, missed your post yesterday...just seeing now...

BPCL:

Stock in uptrend, going sideways since past three months. Momentum setups on daily indicating a fall towards 800-820 zone, if failed to hold 870-875.

815-825 is good zone to go longs for intermediate term trend investors.

For short term traders, expect upmove above 905-910 levels, support at 870875 is crucial one.

Petronet:


For long term investors stock in uptrend, see good entry point at 215-220 with weak below at 205.

For short term traders, stock in correction mode, weak below yesterdays low of 237.5, likely testing zones at 230-220.

Strength sign for short term above, 244-245 levels.

ONGC:

Stock in downtrend, bouncing on daily +ve divergence. Short term closing above 220 is positive can test 230-235 levels.

Intermediate investors need to wait for proper base formation. See likely strength only above 235 levels. A consolidation in offing after this rise, will tell likely direction for stock. See range at 235-245 crucial one.

 

[ravi2126]

Anil ji,how to identify accumulation n distribution is going on in particluar stock?
as i heard from one of tv analysist n forum member about Rcom..is it accumulation going on...your guidline pls

 

[anil_s_trivedi]

Anil ji,how to identify accumulation n distribution is going on in particluar stock?
as i heard from one of tv analysist n forum member about Rcom..is it accumulation going on...your guidline pls

Dear Ravi,

I think i answered about this in this thread only. Anyways, accumulation is nothing but mopping up of shares by smart players and institutions.

For accumulation it should be preceded by a prolonged downturn in stock, where everybody is throwing their holdings and loosing faith in the stock. Such period witness selling on rallies and every rally failed to clear previous peak. Noticeably, on this falling regime, body of bars(candles) and range of bars are bigger on selling bars(down bars) and small body or range on buy(up bars). This tells lost of enthusiasm by bulls.

But as we know, there is a point to fall and at such a juncture, the point of surrender occurs, where every known bulls throw their holdings. This point is witness maximum volume bar. This selling attracts some covering by sellers and a small rally occurs. But again this rally fails to clear previous peak. Noticeably, on this small rally body and range of up bars appear slightly bullish.

After this failed upmove, another sell off occurs where the point of maximum selling get tested, if its a weakness it will go lower, else, institutions now will get into stock, citing good value buying in it. This downleg occurs of low volumes, and body/range of bars is not much bearish on down bars, indicating someone is trying to support stock.

This is for accumulation, if stock in already uptrend there is a minor selling happens, only difference here is volume levels are not much bigger...but conveys same pattern unfolding.

----
Note- Every pattern can fail, you never know whats happening, we are applying what we studying, so you should have backup plan. Never risk more on anytrade, what you cant afford to loose...Let those who shout can go on, but you should have last inch of doubt cleared before getting into stock, its our hard earned money...

 

[XRAY27]

@ Anil ji

What is the average that we can use for daily weekly on volume chart !!!

 

[nitingosavi]

I think i answered about this in this thread only. Anyways, accumulation is nothing but mopping up of shares by smart players and institutions.

yes sir,
you have explained it many times, here in this thread, but still I too, could not grasp it well, tried sometimes to look at the charts to find accumulation/distribution and failed. may be I concentrated on acc/dist more than needed.

 

[anil_s_trivedi]

@ Anil ji

What is the average that we can use for daily weekly on volume chart !!!

Dear XRAY ji,

I am using 50 SMA on daily, so its 10 SMA on weekly. Its an indication of buying/selling going on above average volumes or minimal volumes...

 

[anil_s_trivedi]

Wipro threatening to break support line, more it sustains below 560-570 zone, chances are higher...stock seems to be trying to do some constructive action here, but need more strength to overcame, else its coming in for bear party...

 

[anil_s_trivedi]

IRB a infrastructure company looking poised for further action, probably on upside....expect weakness below 230 levels...

Failure to hold at 230 can drag towards TL support at 195-200 zone...