Trading with Volume Spread Analysis (VSA)

[bunny]

Follow up: ROHITFERRO and VIDEOIND

The outlook for the other scrips remain unchanged, except the ones below:

ROHITFERRO
ROHITFERRO is trading near its resistance zone of 45 to 50. The daily bar of 08 JAN 2010 shows an up-bar, very high volume, closing in the lower part of the spread. Observe how the bar is gapped up. Gaps are of peculiar importance. They commonly occur while crossing a trading range or near the top.
Action: Sell ROHITFERRO.

Daily bar of 11 JAN 2010 is a down-bar with low volume. We must watch this stock for a couple of more sessions. If low volume down-bars persist, ROHITFERRO has the prospect of moving very swiftly upto 60.

VIDEOIND
Daily bar of 08 JAN 2010 shows an up-bar, high-volume, wide spread and closing in the middle of the spread. Hints at selling by professional money.
Action Sell VIDEOIND and reenter on signs of strength.

There appears to be little selling pressure as seen on daily bar of 11 JAN 2010. It looks good for a target of 285 with stop-loss of 239.

 

[bunny]

New stocks on radar for trading from 12 JAN 2010 onwards

KFA
Daily bars of 05 to 07 JAN 2010 show reducing pressure. On way up, there is a trading range around 70. Given the reducing selling pressure in background, the resistance at 70 can be taken out at any moment.
Action: Buy KFA with stop-loss of 63.50 and target 73.

MRPL
On 06 JAN 2010, the stock has crossed its trading range around 82-83. Daily bars of 08 and 11 JAN 2010 show signs of reducing selling pressure.
Action: Buy MRPL with stop-loss 82.50 and target 91.

 

[bunny]

Re: For trading from 11 JAN 2010 onwards

question what is the expected time frame for the above stocks to reach their targets. Please let us know this.

Putting a "Expected Due Date" is difficult. Sometimes, its takes 30, sometimes only 3 days. For ex: MLL has been posted here with a target of 78. Its previous close at the time of posting was 66.10, and today the stock is already trading at 70.25 (+6.3%) in a single trading session.

My personal observation is that "silent" stocks usually move faster than stock which enjoy wide media coverage, or you can also say that large-caps may take more time than mid-caps or small-caps to move. There can be exceptions to this.

 

[bunny]

Hey Bunny,

I am back. This will be a great thread

Can i post a few charts with your Permission Monsieur?

Thanks

Sure, please go ahead.

 

[Pchartis]

hi bunny
Thank you for ur informative post it is surely helping all of us who are trying their hands with VSA without much reading material and experience.
I had some queries :-
You are giving here all cash stk analysis, did u tried with the F&O also?
What is ur criteria of stk selection any screeners or ur favourite or just random selections
As u said u had tried with all other indicators and systems for trading, does that mean VSA has more accurateness than others?
When u actually trade u take signals from VAS alone or do u depend on other indicators also for confirmation like MACD divergance or ADX etc
Do u trade on 60 minutes charts (like karthik sir) or lower timeframe or just swing trade studying all time frames?
Sorry for really long list of queries
I myself follower of VSA (very comfertable with it) with less experience with other systems and indicators. Not trading actively as just learing and applying VSA (testing myself for outcome accuracy) So bothering you to help all other like me
Regards,
Panno

 

[bunny]

You are giving here all cash stk analysis, did u tried with the F&O also?

F&O are derivatives of cash markets. Hence, movements in cash markets affect F&O, and not vice-versa. Only in cases where underlying cash security cannot be analysed, such as an index, futures volume may be used. But even for that, VSA does not yield as favorable results as for individual cash stocks.

What is ur criteria of stk selection any screeners or ur favourite or just random selections

Usually random, but only if the chart shows characteristic VSA events. If something smells fishy, the chart is ignored.

As u said u had tried with all other indicators and systems for trading, does that mean VSA has more accurateness than others?

I have not traded much using other systems. I did try with chart patterns, candlesticks and technical indicators but not a long period. May be three or four weeks. I don't want to comment whether VSA is more accurate compared to others.

Last month (DEC 2009), I have taken positional trades in three scrips(cash market). Exited two of them with 10% profit in one, 17% in another in 20 days. Still holding the third scrip in profit for higher gains. Had I taken these trades in F&O market, I would have yielded much more returns, but I did not because I wanted the money for something else(and hence has less margin money)

When u actually trade u take signals from VAS alone or do u depend on other indicators also for confirmation like MACD divergance or ADX etc

Only VSA.

Do u trade on 60 minutes charts (like karthik sir) or lower timeframe or just swing trade studying all time frames?

Daily TF.

 

[bunny]

Volumes Today - 12 JAN 2010

There is some remarkable deviation in between the cash and futures market volumes. The volumes in the cash market were average and lower than yesterday. The volume in the futures market is almost double than yesterday. Interesting to note that the open interest has come down on a down day? What does all this point to? Perhaps an opportunistic markdown. Since I don't watch CNBC I have no idea what was the opportunity.

Expect the broader market to turn upwards very soon.

 

[bunny]

Follow up

If you have taken positions in any scrips, please monitor their stop-loss levels. I do not track them.

BARTRONICS has formed a wide-spread up-bar on high volume that closes in the middle. However, during OCT 2009, the stock has slipped down from the same level. So it is also possibly absorption volume. Whether there is any follow on selling will be clear only after a down-bar.

KLAUSHALYA - All going well. Today's down-bar had very low volume. No revision in action.

KFA was disappointing in price action, however, there is no significant volume action. Stop-loss has been triggered, but the bullish opinion is maintained.

MLL - Today's bar was a down-bar, volumes were also significant. However, in the immediate background, we have seen no-selling day on 08 JAN 2010. No revision in action.

MRPL may be developing weakness, stop-loss has been triggered.

NATIONALUM - Down-bar, low volume, bar closing in the middle. Good for long. No revision in action.

ROHITTFERRO - A wait and watch approach had been adopted yesterday as the volume on yesterday's down bar was not high. However, today's bar is also similar. Sell maintained, wait for opening long positions.

ROLTA - Today's bar was an average volume, up-bar closing on the lows. Bullish opinion maintained.

VIDEOIND - Disappointing. Volume persisted.

 

[bunny]

New stocks on radar for trading from 13 JAN 2010 onwards

SUNFLAG
It has recently crossed its resistance near 26. There are signs of reducing selling pressure. On way up, there are around four lower circuits during the period of JAN 2008.

Action: Buy SUNFLAG with stop-loss 27 and target 40.

TULIP
The stock is trading at the levels of a trading range created during the third week of SEP 2009. Volumes have picked up in the last 3 daily bars, indicating possible absorption. The lasy daily bar, 12 JAN 2010 is a low volume down-bar indicating little selling interest.

Action: Buy TULIP with stop-loss 1000 and target 1150.

 

[rajeabc]

Bunny, how do you see NTPC and rcom before expiry ?

Thanks