Random thoughts on technical analysis
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on daily chart adx is 21,so its near 20 that means short term downtrend near end,but - di above + di.so not very clear signal on adx, macd line has a downword slope,,rsi also has down word slope ,on weekly chart adx is 31 so its strong that means short term downtrend on weekly basis on,also there is big gap in macd line and histrogram,that will feel,so market in range write 4200 put n 4500 cl
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TWO PHASES OF MARKET.(JUST FOR STARTERS)
BULL PHASES
Accumulation by strong hands( IN VOLUME SPREAD ANALYSIS CALLED SMART PEOPLE) usually of 20 to 35 % of total bull phase,characterized by doubts.No one belief that trend is changing.Oil market is perfect example.Wall street always used to speak against rising oil trend.And oil kept riding the first phase of bull.I will explain more suppose in a hall there are 1000 ppl,and all decided to buy oil,then who will sell?,oil will stop rising in absence of sellers,and suppose majority of people in the hall out of 1000, lets say 700 thought it would not rise,they will keep selling,and because there is more supply that supply will soak out by those 300 people,and obviously one caveat here those 300 ppl must have big and deep pockets to soak that supply.In market there are always those people lurking for chance.So why oil rose up to 140$ something level,now interestingly wall street recommended buy, i red in last months 'technical analyst' Maxine a buy report so market enters in to next phase (thats why few analyst thought it crude oil will go to 180$,now who had thought from 50$ it will go up to 150$ ?)called
Acceleration phase,in this mostly banks,fund houses are involved they play on percentage of profit margin with huge money,and always looking for quick opportunity.Then market enters in to
Mania or Top out
No need to explanation haha as all knew it what is this phase is,as we all witnessed on last may and this years jan fall.Then market enters to
BEAR PHASE
Distribution to suckers by high interest money ppl,who trade on margin money and in that add fuel by smart people.
panic characterized as sliding slope of hope,as few ppl who still hoping start selling swearing on never to enter market,its satta n bla bla
Distress selling also cal clean out,it characterized by margin selling.Best example is Orchid chemical stock,few months back it fall only because of margin selling of the stocks of a promoter by funds and brokers. (who kept his shares as a collateral for his margin money so he can buy more shares of his own company and hold the fall,as promoter was worried that because orchid has fallen too much and its cheap so there will be threat of hostile takeover..anyway its a different story all together .)
BULL PHASES
Accumulation by strong hands( IN VOLUME SPREAD ANALYSIS CALLED SMART PEOPLE) usually of 20 to 35 % of total bull phase,characterized by doubts.No one belief that trend is changing.Oil market is perfect example.Wall street always used to speak against rising oil trend.And oil kept riding the first phase of bull.I will explain more suppose in a hall there are 1000 ppl,and all decided to buy oil,then who will sell?,oil will stop rising in absence of sellers,and suppose majority of people in the hall out of 1000, lets say 700 thought it would not rise,they will keep selling,and because there is more supply that supply will soak out by those 300 people,and obviously one caveat here those 300 ppl must have big and deep pockets to soak that supply.In market there are always those people lurking for chance.So why oil rose up to 140$ something level,now interestingly wall street recommended buy, i red in last months 'technical analyst' Maxine a buy report so market enters in to next phase (thats why few analyst thought it crude oil will go to 180$,now who had thought from 50$ it will go up to 150$ ?)called
Acceleration phase,in this mostly banks,fund houses are involved they play on percentage of profit margin with huge money,and always looking for quick opportunity.Then market enters in to
Mania or Top out
No need to explanation haha as all knew it what is this phase is,as we all witnessed on last may and this years jan fall.Then market enters to
BEAR PHASE
Distribution to suckers by high interest money ppl,who trade on margin money and in that add fuel by smart people.
panic characterized as sliding slope of hope,as few ppl who still hoping start selling swearing on never to enter market,its satta n bla bla
Distress selling also cal clean out,it characterized by margin selling.Best example is Orchid chemical stock,few months back it fall only because of margin selling of the stocks of a promoter by funds and brokers. (who kept his shares as a collateral for his margin money so he can buy more shares of his own company and hold the fall,as promoter was worried that because orchid has fallen too much and its cheap so there will be threat of hostile takeover..anyway its a different story all together .)
Professional traders exploit the crowd’s tendency to place stops a
a rupee below the latest low year after year. They know where those
stops are. There is no law that prohibits professionals from looking
at charts. The pros expect to find huge number of stops just below the latest support zone.
As a stock sinks towards the level of an important low, its trading
volume tends to dry up. All eyes are on that stock, but there is not
a lot of activity, as people wait to see whether the support will hold.
A small sell order, thrown at the market while buy orders are thin, can
push the stock down, below its previous low. That’s the area where
many serious pros love to operate.
As the falling stock sets off the stops of public customers, the pros
snap up shares at a discount. In authentic pure breakdown(or breakout for shorts)If there are so many shares for sale that
the stock accelerates down, they quickly cut their losses and let it slide, but this rarely happens. Normally, the number of shares sold by
the people with stops is not that great. As their sales get absorbed and
the decline stalls, the pros jump in, joining the feeding frenzy, buying
below the lows. The stock rises back into the range, leaving behind a
brief down spike—a trace of the pros making bakra!!!!. They have just
scared a bunch of anonymous amateurs into selling them stocks at a
discount. Has this ever happened to you? answer is make a stop below 3,4 ticks where no danger of false breakdown,( i am big fan of elder alexander he cal it safe zone,),and when stocks jump they make it very good positive or bullish divergence on charts , wait for stock to jump above previous low and buy with safe stop in order
a rupee below the latest low year after year. They know where those
stops are. There is no law that prohibits professionals from looking
at charts. The pros expect to find huge number of stops just below the latest support zone.
As a stock sinks towards the level of an important low, its trading
volume tends to dry up. All eyes are on that stock, but there is not
a lot of activity, as people wait to see whether the support will hold.
A small sell order, thrown at the market while buy orders are thin, can
push the stock down, below its previous low. That’s the area where
many serious pros love to operate.
As the falling stock sets off the stops of public customers, the pros
snap up shares at a discount. In authentic pure breakdown(or breakout for shorts)If there are so many shares for sale that
the stock accelerates down, they quickly cut their losses and let it slide, but this rarely happens. Normally, the number of shares sold by
the people with stops is not that great. As their sales get absorbed and
the decline stalls, the pros jump in, joining the feeding frenzy, buying
below the lows. The stock rises back into the range, leaving behind a
brief down spike—a trace of the pros making bakra!!!!. They have just
scared a bunch of anonymous amateurs into selling them stocks at a
discount. Has this ever happened to you? answer is make a stop below 3,4 ticks where no danger of false breakdown,( i am big fan of elder alexander he cal it safe zone,),and when stocks jump they make it very good positive or bullish divergence on charts , wait for stock to jump above previous low and buy with safe stop in order
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