Learning to catch High Probability Breakouts

[earth]

Chart for Nifty Weekly

My analysis of the chart is as under,
(i) this week saw a trend line breakout
(ii) next resistance levels 8500, 8620
(iii) as on date, nifty has not been able to cross 8500, but with 8400 PCR today becoming > 1.0 and the trend line breakout, it is likely to be broken.

Request your views, analysis.

@Amit - does the trendline drawn still hold or a new one needs to be drawn

 

[amitagg]

NitinJi

We cannot predict what a stock will do,our analysis are just probabilities and they may come right or go drastically wrong.

We just follow price action wherever it goes.If it breaks out of the channel, we draw another channel.If it stays within the channel, we trade accordingly.

The stock does not know that we have drawn a channel on its price action.

With crude falling and if breaks 3500 to target 3200, BP should give an up break.

 

[amitrandive]

Chart for Nifty Weekly

My analysis of the chart is as under,
(i) this week saw a trend line breakout
(ii) next resistance levels 8500, 8620
(iii) as on date, nifty has not been able to cross 8500, but with 8400 PCR today becoming > 1.0 and the trend line breakout, it is likely to be broken.

Request your views, analysis.



@Amit - does the trendline drawn still hold or a new one needs to be drawn

Multiple ways of interpreting a chart.
Shows weekly consolidation on Nifty chart,8500 being a strong resistance.Support of 8000.Monday will be crucial for all world markets.(Greece Impact)


Regarding trendlines, sometines its better to leave the old trendlines in place and draw new ones to include the recent price action,to check the re-test of the trendline after the breakout.

Weekly chart of Spot Nifty

Do not follow PCR , so no idea.Check the Monthly chart of Spot Nifty which shows the long range sideways movement.

Monthly chart of Spot Nifty

 

[amitrandive]

 

[indianbank]

Bliss GVS Pharma...

Positional traders can try this... i too waiting to enter this ..

 

[nitingosavi]

very usefull post for me.... many of my confusions cleared

thanks for all your helpful posts AMIT ji.

 

[earth]

Multiple ways of interpreting a chart.
Shows weekly consolidation on Nifty chart,8500 being a strong resistance.Support of 8000.Monday will be crucial for all world markets.(Greece Impact)


Regarding trendlines, sometines its better to leave the old trendlines in place and draw new ones to include the recent price action,to check the re-test of the trendline after the breakout.


Do not follow PCR , so no idea.Check the Monthly chart of Spot Nifty which shows the long range sideways movement.]

@Amit - this is a good thread which you have been running. IMO the operative word is in the thread name ie "Learning". TA being an art as well as science, the only way one can learn about the subject is to practice ie look at the chart objectively, analyse and compare the analysis with how the market unfolds in the following days and then repeat the cycle again. Value addition to this cycle can be in the form of complementary, opposing views on the same chart based on some other set of parameters or a different way of analyzing the same chart or a different methodology ie in a nutshell - participation of different members in analyzing a chart.

Pl take this as a suggestion, as this is your thread and you have been doing fine in keeping this thread alive and interesting.

 

[amitrandive]

Trend Line Theory (Pullback)
http://www.tradingsetupsreview.com/...eory-using-trend-lines-for-trading-pullbacks/

First, you need to learn how to draw the 0-2 and 0-4 lines. In a bull trend, point 0 is the extreme high of the trend. It is the point where the pullback downwards begin.

Refer to the diagram below and start by labeling the points 0 to 4.
Then, connect point 0 to point 2. That’s your 0-2 line (in green).
Now, connect point 0 to point 4 for your 0-4 line (in red).

The crux of our evaluation lies in which the relative slope of the two lines.

Trend Line Theory - Skip the Pullback Trade

If the 0-4 line is steeper, the pullback has power. Avoid trading this pullback.

Trend Line Take the Pullback Trade

If the 0-2 line is steeper, the pullback lacks strength, consider trading this pullback.

The examples above show a bullish market. You can apply the same logic to bearish markets. Go through an exercise to draw the equivalent diagram for a bearish trend. (Check your conclusion against the trading rules below.)

Long Pullback Trade

• Bull trend
• 0-4 line is higher than 0-2 line
• Buy on bullish breakout of 0-4 line

Short Pullback Trade

• Bear trend
• 0-4 line is lower than 0-2 line
• Sell on bearish breakout of 0-4 line

The setup rules might be a little confusing at first. Just focus on the 0-4 line.

For a long pullback trade in a bull trend, the 0-4 line should be higher.
For a short pullback trade in a bear trend, the 0-4 line should be lower.

 

[amitrandive]

 

[timepass]

That "Accumulation" and "Distribution" is hindsight. Nearly impossible to predict which way the range will break while the market is rangebound.