Pattern Trading

jdm · #**111** 29th January 2007, 09:13 AM

Quote:

Originally Posted by bvpraveen

Although the bookish knowledge tells that the volume should be high on breakout day, I couldn't understand why its sufficient even if the breakout days' volume is less and the following day's volume is high. Isn't it against the theory. Can you please explain it?

yeah the volume in hdfc is very confusing. in this scenario it is much better to check up how the volume was, say in the futures or in bse. the big volume can be a result of a, say, block deal, which the chartist should take as noise and act accordingly. looking at the intraday charts can give the true picture.

cheers,
jdm.

P.S. - ashish you are doing a great job. filling the void which saint amitbe, vv etc has left.

bvpraveen · #**112** 29th January 2007, 09:39 AM

Quote:

Originally Posted by jdm

yeah the volume in hdfc is very confusing. in this scenario it is much better to check up how the volume was, say in the futures or in bse. the big volume can be a result of a, say, block deal, which the chartist should take as noise and act accordingly. looking at the intraday charts can give the true picture.
......

Thanks Joy for giving a better picture of the problem. Will checkout the other options you'd mentioned, tonight.

Regards,
Praveen.

kkseal · #**113** 29th January 2007, 09:43 AM

Quote:

Originally Posted by bvpraveen

Although the bookish knowledge tells that the volume should be high on breakout day, I couldn't understand why its sufficient even if the breakout days' volume is less and the following day's volume is high. Isn't it against the theory. Can you please explain it?

Praveen.

The mkts don't always go by the books

Books tell us the most probable case, but there are always slight variations.

If you see the hourly chart of the stk (for brkout day) you'll probably find a rise in volumes in the last 2 hrs or so.

Regards,
Kalyan.

bvpraveen · #**114** 29th January 2007, 08:21 PM

Quote:

Originally Posted by jdm

yeah the volume in hdfc is very confusing. in this scenario it is much better to check up how the volume was, say in the futures or in bse. the big volume can be a result of a, say, block deal, which the chartist should take as noise and act accordingly. looking at the intraday charts can give the true picture.
.....

Hello Joy,

I checked with BSE - which again gives the same observations as in NSE.
Then hourly chart of HDFC in NSE. Can you please refer to the attached hourly chart, and give the interpretations?

Thanks,
Praveen.

jdm · #**115** 30th January 2007, 09:55 AM

bv,
look at the futures charts. things are pretty good there and it followed the books

again hourly charts are not the right tool for the interpretation. one needs tick data (so that each transaction could be analysed). i have 5 min futures data for hdfc and data for nse cash at an interval of 50 seconds (the data source being ***** i do not rely on them much). so just lacks the tools

we wait for ashish to through more light on this matter.

cheers,
jdm.

bvpraveen · #**116** 30th January 2007, 10:05 AM

Quote:

...followed the books

By the words "...bookish knowledge..", I meant what I'd learnt about the volume behavior from books. I'm not in the view that we need to stick to what they tell in books. I was just trying to understand the situation in case of HDFC, which I'm not able to find in 'books'.

Quote:

again hourly charts are not the right tool for the interpretation. one needs tick data (so that each transaction could be analysed).

Learnt a new point. Thanks.

Thanks for your information.

Regards,
Praveen.

kedarvb · #**117** 30th January 2007, 10:51 AM

Thanks,

Best site on Breakouts trading and pattern trading.

Strong Recommendation Must see the Blog Before Trading

Regards.

Kedar

aca_trader · #**118** 30th January 2007, 11:18 AM

Quote:

Originally Posted by bvpraveen

Hello Ashish,

Thanks for your replies.

Although the bookish knowledge tells that the volume should be high on breakout day, I couldn't understand why its sufficient even if the breakout days' volume is less and the following day's volume is high. Isn't it against the theory. Can you please explain it?

Thanks a lot,
Praveen.

Hi Praveen!

The reply was based upon colatteral evidence and not against the thory. I beg pardon for not being able to explain in detail due to a tied up schedule. The collateral evidence here is nothing other than what Joydeep has talked about, i.e., futures data and lower periodicity charts.

I am attached the futures and Intraday charts to the extent possible. Most of the intraday charts are futures charts which can be assumed to reflect the seniments of the Cash Market in actively traded securities.

the same triangle is evident on hourly charts which once again show considerable increase in volume on breakout bar. Also, the previous pivotal low on hourly charts made a double bottom of sort.

Further, As is evident from the intraday charts, we can see that in hourly chart of HDFC (Courtsey-Icharts) the volume is approximately double of the previous bar. In 5 Minute Futures Chart, at the point of breakout from rectangle (the same point of breakout from triangle on hourly and daily charts) is astronomical.

Keeping in mind these factors, the breakout was assumed to be genuine and hence the second day action was taken as follow-up action which IMHO is mosre necessary than the breakout action itself. Absence of follow-up action usually smacks of the stop-running adventures of the biggies.

Best Regards,
--Ashish
http://tradingtalks.blogspot.com

P.S. : I agree with Joy that the tools of 5 minute and 1 hour put certain restrictions on the analysis.

aca_trader · #**119** 30th January 2007, 11:20 AM

Quote:

Originally Posted by jdm

we wait for ashish to through more light on this matter.

cheers,
jdm.

Joy!

There is nothing that I can throw light upon better than you.

Best Regards,
--Ashish
http://tradingtalks.blogspot.com

aca_trader · #**120** 30th January 2007, 11:21 AM

Quote:

Originally Posted by jdm

P.S. - ashish you are doing a great job. filling the void which saint amitbe, vv etc has left.

Joy!

Thanks for your kind words but those shoes are too big and my feet are very small.

Best Regards,
--Ashish

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