Some Good Steals...
- Thread starter AMITBE
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hi Amit, (Minus the Ji)
Thanks for the advice. I was thinking of investing in Indiabulls on thursday. Would you say go or wait and watch.
Being a newbie, it is better to ask then trust the fate.
Waiting.. and please can you just put in some recommendation for other shares. Intrested in holding for a week.. but day trading would be lovely.
Thanks again
Nishant
Thanks for the advice. I was thinking of investing in Indiabulls on thursday. Would you say go or wait and watch.
Being a newbie, it is better to ask then trust the fate.
Waiting.. and please can you just put in some recommendation for other shares. Intrested in holding for a week.. but day trading would be lovely.
Thanks again
Nishant
Hi Nishant...I'll be looking for some possibilities over the weekend as in the remaining two days of trade the market should signal some kind of a trend.
The current rally of the last several days is devoid of volume and on poor a/d ratio. Lots of nervousness too with quick profit booking at higher levels.
Don't put any money in Indiabulls for now as there is volatile correction happening here. Will look into the other stock you have mentioned later.
Regards.
The current rally of the last several days is devoid of volume and on poor a/d ratio. Lots of nervousness too with quick profit booking at higher levels.
Don't put any money in Indiabulls for now as there is volatile correction happening here. Will look into the other stock you have mentioned later.
Regards.
Hi...there is an interesting topic 'breakout' being discussed at METHODS & STRATEGIES > Technical Analysis where I had earlier participated.
People like Ajay, Karthik, Murali, cmlee and so many others, are taking this great forum to greater heights and there is a lot of learning going on. Great work, people...with all of us pooling in behid Traderji, this is without doubt the only forum of its kind!
For me personally, being amidst books again feels wonderful...thanks to you guys.
For those who visit my thread regularly, I'm posting my contribution to the discussion here:
Hi cmlee, Karthik, Ajay and Murali...
Below I am adding a supplement to the issue of breakouts and false breakouts. This is from my research and notes of the past. It's always difficult to remember everything one has read, so this was a good opportunity for me to open some books again! Thanks!
Breakouts almost always occur at points of discord and divergence: levels of support and resistance. On either side of these levels, a lot of price action is generated, but no one is quite sure just how much force is required to carry price into a sustainable trend. Any position one takes near a breakout level comes with a fair deal of risk, regardless of how perfect a pattern may appear.
Price action responds in different ways to a breakout. First, it may carry through successfully to higher levels. Second, it may generate whipsaws (volatile and choppy price swings through support or resistance levels), resulting in losses on both sides of the market. Third, it may trap buyers in a false move and start a trend in the opposite direction.
It is believed by some technical analysts that a successful breakout occurs in three phases.
It begins when price breaks through resistance on increased volume. This is called the Action Phase. Price increases by a few points, and then reverses as soon as buying interest fades.
From here begins the Reaction Phase. The market will sell off, and propagate the first pullback, where fresh buyers see a chance to get in close to the breakout price. If everything goes well, a second rally kicks in and raises the price above the initial breakout high.
This marks the Resolution Phase where the price creates new highs.
For the three phases of a breakout to succeed, much depends on certain volume action:
Demand must exceed supply during the initial breakout. Volume should drop sharply during the pullback of the Reaction Phase. And finally, fresh buyers should come in to successfully trigger the Resolution Phase.
A false breakouts occurs when these forces fall out of balance.
Whipsaws will prevail when a breakout can't generate an efficient reaction phase. This failure need not necessarily trigger any major reversal, though the pullback will purge out weak hands and push the price back into resistance.
If there is a good number of buyers in the scrip throughout the choppy price action, they will repeatedly support the price, and as soon as the whipsaw fades out, the price stablises resulting in a loss of volatility.
A voluminous sideways movement in a tight price-band will then come into play, which itself acts as a trigger for a buy signal for the experienced traders. This would then start a bounce up in price to carry it beyond the last high.
Mainly then, once the first lot of buyers enter at the initial breakout point, much depends on the behaviour of the successive hoards of buyers.
A false breakout occurs when this second crowd fails to appear for any reason, whether its a failure to spot the breakout, or a disagreement with the price pattern. Without the support of fresh buyers, the scrip gets stranded in an overbought zone and falls from its own weight.
To extend this further, every new low will trigger s/l points, building momentum to the down, drawing with it new short-sell traders as more key supports are broken. Here a sharp reversal is now under way.
Hope this will add to the wider understanding of the subject...
Regards.
People like Ajay, Karthik, Murali, cmlee and so many others, are taking this great forum to greater heights and there is a lot of learning going on. Great work, people...with all of us pooling in behid Traderji, this is without doubt the only forum of its kind!
For me personally, being amidst books again feels wonderful...thanks to you guys.
For those who visit my thread regularly, I'm posting my contribution to the discussion here:
Hi cmlee, Karthik, Ajay and Murali...
Below I am adding a supplement to the issue of breakouts and false breakouts. This is from my research and notes of the past. It's always difficult to remember everything one has read, so this was a good opportunity for me to open some books again! Thanks!
Breakouts almost always occur at points of discord and divergence: levels of support and resistance. On either side of these levels, a lot of price action is generated, but no one is quite sure just how much force is required to carry price into a sustainable trend. Any position one takes near a breakout level comes with a fair deal of risk, regardless of how perfect a pattern may appear.
Price action responds in different ways to a breakout. First, it may carry through successfully to higher levels. Second, it may generate whipsaws (volatile and choppy price swings through support or resistance levels), resulting in losses on both sides of the market. Third, it may trap buyers in a false move and start a trend in the opposite direction.
It is believed by some technical analysts that a successful breakout occurs in three phases.
It begins when price breaks through resistance on increased volume. This is called the Action Phase. Price increases by a few points, and then reverses as soon as buying interest fades.
From here begins the Reaction Phase. The market will sell off, and propagate the first pullback, where fresh buyers see a chance to get in close to the breakout price. If everything goes well, a second rally kicks in and raises the price above the initial breakout high.
This marks the Resolution Phase where the price creates new highs.
For the three phases of a breakout to succeed, much depends on certain volume action:
Demand must exceed supply during the initial breakout. Volume should drop sharply during the pullback of the Reaction Phase. And finally, fresh buyers should come in to successfully trigger the Resolution Phase.
A false breakouts occurs when these forces fall out of balance.
Whipsaws will prevail when a breakout can't generate an efficient reaction phase. This failure need not necessarily trigger any major reversal, though the pullback will purge out weak hands and push the price back into resistance.
If there is a good number of buyers in the scrip throughout the choppy price action, they will repeatedly support the price, and as soon as the whipsaw fades out, the price stablises resulting in a loss of volatility.
A voluminous sideways movement in a tight price-band will then come into play, which itself acts as a trigger for a buy signal for the experienced traders. This would then start a bounce up in price to carry it beyond the last high.
Mainly then, once the first lot of buyers enter at the initial breakout point, much depends on the behaviour of the successive hoards of buyers.
A false breakout occurs when this second crowd fails to appear for any reason, whether its a failure to spot the breakout, or a disagreement with the price pattern. Without the support of fresh buyers, the scrip gets stranded in an overbought zone and falls from its own weight.
To extend this further, every new low will trigger s/l points, building momentum to the down, drawing with it new short-sell traders as more key supports are broken. Here a sharp reversal is now under way.
Hope this will add to the wider understanding of the subject...
Regards.
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