New Intermed Uptrend!!

[albertpravin]

Don't Buy Stocks On The Way Down; Stick To Breakouts

Buy low, sell high.
For decades it's been a market mantra. Buy a stock just as it hits bottom, sell at its peak, and you'll get rich quick.Too bad it's not that easy. No one can know for sure when a stock will hit bottom. As a general rule, stocks and markets that go up tend to keep going up while those that go down tend to keep going down.

The result? Try to buy a falling stock, and you'll usually get burned.

Consider the reasons for a stock's descent. In many cases, a stock that falls is merely following the lead of the broader market. Since three out of every four stocks follow the major indexes' lead, buying in a bear market is a recipe for disaster.

A stock may also fall if the company runs into hard times. A younger, hungrier rival may grab market share. Its core product may become obsolete. The economy may go into a downturn, hurting the industry.

Sometimes the reasons for a decline can be more benign. No stock can go up forever, and yours may simply be forming a new base.

But you can't accurately predict exactly when the stock will hit the bottom of its base and surge back up.

research shows that the best combination of upside potential and lower risk occurs when a stock breaks out of a sound base. Rather than buying on the way down, buy only during breakouts and you'll increase your odds of success.


regards,
Pravin

 

[Traderji]

Re: Don't Buy Stocks On The Way Down; Stick To Breakouts

The mantra for profitable trading is

BUY HIGH, SELL HIGHER

 

[Saint]

What About Tata Tele
& Reliance
& Ntpc
& Gecap

Hi,

TATA TELE:Still looking good.......that breakaway gap still yet to be filled.If in,it's a hold.

REL IND:Making higher pivot lows and highs......so far so good.Still a hold.

NTPC:Again,a hold.....Raise stop loss to 98.

Happy Trading!
Saint

 

[Saint]

Hello Saint,

What is your view on Hindalco and Uniplex for long term investment?

Regards,
Narendra

Hi Narendra,

Since you are planning an entry for a long term investment,I presume you had done your study of the company,fundamentals,etc........From the tech perspective,think it's a good idea to wait and see how this week ends up as.

That breakout bar 2 weeks ago got negated last week,and if this week ends weak for Hindalco,we have something of a failed breakout on the monthly charts.Wait and watch how this Friday close,which is the end of the week and end of the month.From there we can make a decision.

Saint

 

[Saint]

REVERSAL PATTERNS(CONT.)

5.CUP WITH HANDLE FORMATION

-also a reversal pattern,but more obvious at the bottom rather than at the top.
-basically looks like a coffee cup with a handle.
-There is a basing stage,accumulation phase(cup),then a breakout,followed by a pullback,forming what looks like a handle.
-Breaking out of the top of the cup is confirmation of a change in trend.

-Few criteria:The cup should be more rounded than a "V".
The handle should be in the top part of the cup,not too deep.
Cup pattern should take at least 7weeks to form.
Volumes should contract in the handle and expand on b/out.

-From a trade perspective,the buy is at the area where the top of the cup is taken out.Stop:At the low of the handle.Target:Measure the distance to the low of the cup.Add that to the breakout area.

6.REVERSE CUP N HANDLE
-Occurs at the top,rest all reverse of the above.

7.BROADENING FORMATION

-When the trendlines,from left to right,converge.....it's called a triangle.When the trendlines start from a point and diverge as we go from left to right of the chart,that's called a Broadening Formation.
-One more interesting feature:In a triangle,volume decreases within the pattern.In a Broadening Formation,volume expands along with wider price swings.
-This is a BEARISH pattern.
-Due to its divergence,the stock makes a high and a low,then high2 will take out previous pivot high,then prices fall to low2,which takes out the previous pivot low.Then prices move upwards to form high3,which is higher than high2 or high1(not necessary,can even be same height at times).
-Three successive higher peaks,and two declining lower troughs complete this pattern.Confirmation is when the low 2 is taken out as prices start making new lows.

More later!!

Happy Trading!!
Saint

 

[naga2054]

Hi Ragh_Ash,

My data is from Viratech........EOD=9000+VAT
INTRADAY=55000+VAT
The costs on an annual basis.

Saint

Hi Ragh_Ash..
Mebbe u can try the software from islindia.com . It has a trial for 7 days, after which u can buy it for a one time fee of 3K bucks..

gives EOD data of NSE in the Metastock format.. i found it very useful

njoy trading
Nagzu

 

[Anupama Singh]

Hi Saint,

Thank you so much for all those posts on "reversal patterns".....extremely greatful,I think I talk for many of the newcomers here,when I say that I am extremely fortunate to have found Traderji.com,and have learnt so much after coming here!!

Thank you !!!

Anu

 

[Saint]

Hi Anupama,

Great to know that you've learnt a lot after coming here.......also great to know that I could help in some small way.

Sincerely appreciate your kind words!

Saint

 

[Saint]

GAMMON at target........we are still holding.Raise the stop loss to 360.

Saint

 

[AMITBE]

Hi saint...my target from here 500 first in 4-6 weeks.
Cheers.