Technique is very simple.
(1)you need first a technical analysis software to screen overbought stocks.
(2)Screen stocks with closing price greater than upper bollinger band by atleast 3% and volume atleast 1 lakh
(3)On next day short sell this stocks at price higher than the projected Upper bollinger band.
(4)Keep a strict stop loss of 2%.
See one example in attachment.
On the date 5/3/2012 close price of stock was 52.25 and UBB was at 49.5.
Now if we project UBB line(RED thick line) as per trend for next trading day UBB value would be around 51.5 rs and that is our base price above which we can short stock.
On next day tinplate open at 51.5 ,high 54.2 and close 49.95.
If we have short at 53.5 then also we would have good profit at the end of day.
(1)you need first a technical analysis software to screen overbought stocks.
(2)Screen stocks with closing price greater than upper bollinger band by atleast 3% and volume atleast 1 lakh
(3)On next day short sell this stocks at price higher than the projected Upper bollinger band.
(4)Keep a strict stop loss of 2%.
See one example in attachment.
On the date 5/3/2012 close price of stock was 52.25 and UBB was at 49.5.
Now if we project UBB line(RED thick line) as per trend for next trading day UBB value would be around 51.5 rs and that is our base price above which we can short stock.
On next day tinplate open at 51.5 ,high 54.2 and close 49.95.
If we have short at 53.5 then also we would have good profit at the end of day.
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