Pattern Trading

aca_trader · #**211** 13th February 2007, 08:53 AM

Quote:

Originally Posted by Bullet

Thanks for the reply Ashish.

Is there any pattern formation in Hindalco ?

THANKS
BULLET

Hi Bullet!

Always a pleasure to answer as much as possible.

Hindalco had a breakout from a descending triangle.
Now with yesterday's fall, it can be termed a failed pattern BO.
But IMHO, the negative breakouts made yesterday are to be taken with a pinch of salt. First of all, buying may resume at any level and again the R:R is in favour of risk in most of the cases. If the negativity is genuine, let it make a pullback and resume the downward journey. At that time, any negative BO should be acted upon.

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

aca_trader · #**212** 13th February 2007, 08:59 AM

Is NIFTY an H&S on 60-Min chart? Chk out the discussion on http://www.traderji.com/technical-an...html#post77731

aca_trader · #**213** 13th February 2007, 09:01 AM

Quote:

Originally Posted by bvpraveen

Hello Ashish,

What kind of trailing stop loss you are using? For pattern trading, what are the trailing SL methods will be effective, like last bars low/high, some % below close/high, pivot low/high, etc

Thanks,
Praveen.

Hi Praveen!

As of Now, I use the Pivotal lows/highs and Trendline Breaks.
Last 2/3 bars' low/high should be used only in case of a hyperbolic (almost straight line) run. %age SL is a method one should never use.

Best Regards,
--Ashish

aca_trader · #**214** 13th February 2007, 09:18 AM

Quote:

Originally Posted by bvpraveen

Hello all,

Can anyone please clarify the volume interpretation in the attached chart : Corp Bank is forming descending triangle. But its volume information is confusing.

Praveen.

Hi Praveen!

The volume showed that volume increased every time the price touched the base line of descening triangle.

It would mean two things:
1. A number of buy orders are coming at the support level, or
2. A number of sell orders are coming at the base level which are being encountered by buy orders and thereby holding the price at support level.

The first scenario is bullish but the second scenario is bearish 'coz as and when the demand is exhausted, the break-down would be on a massive scale.
In normal circumstances, we could have considered yesterday's breakdown as a valid time to sell. But, as mentioned earlier, we should wait for a pullback in all cases of negative breakouts which are result of the crack in NIFTY otherwise the chances of being trapped are on a very higher side.

Yet, an aggressive player can short the stock with a SL at 312.

Best Regards,
--Ashish

newbie123 · #**215** 13th February 2007, 09:41 AM

Hi,
Accumulation/Distribution and Chaikin oscillator showing bearish trand in the short term. Let's see if the support at 4040 holds.

oxusmorouz · #**216** 13th February 2007, 10:29 AM

Hi Ashish,
Could you please tell if the given chart would qualify as a rectangle? I'm new to patterns and in the process of study I came across this formaton and thought it looked pretty convincing. I seek your help in my course of study. Thanks.
(please enlarge the chart...otherwise it doesn't seem to be clear)

Oxy

bvpraveen · #**217** 13th February 2007, 10:36 AM

Quote:

Originally Posted by aca_trader

Hi Praveen!

As of Now, I use the Pivotal lows/highs and Trendline Breaks.
Last 2/3 bars' low/high should be used only in case of a hyperbolic (almost straight line) run. %age SL is a method one should never use.

Best Regards,
--Ashish

Hello Ashish,

Thanks for your information.

Meanwhile how to deal with the situation, when the stock reaches its minimum price target.Can we book partial profit, say for half of
our shares, at the minimum price target level?

Praveen.

bvpraveen · #**218** 13th February 2007, 10:46 AM

Quote:

Originally Posted by aca_trader

Hi Praveen!

The volume showed that volume increased every time the price touched the base line of descening triangle.

It would mean two things:
1. A number of buy orders are coming at the support level, or
2. A number of sell orders are coming at the base level which are being encountered by buy orders and thereby holding the price at support level.
............

Thanks for the clarification.

Praveen.

aca_trader · #**219** 13th February 2007, 11:16 AM

Quote:

Originally Posted by bvpraveen

Hello Ashish,

Thanks for your information.

Meanwhile how to deal with the situation, when the stock reaches its minimum price target.Can we book partial profit, say for half of
our shares, at the minimum price target level?

Praveen.

I would suggest following the stock instead of booking partial profits. But at the end, it all boils down to individual personality.

Best regards,
--Ashish

aca_trader · #**220** 13th February 2007, 11:22 AM

Quote:

Originally Posted by oxusmorouz

Hi Ashish,
Could you please tell if the given chart would qualify as a rectangle? I'm new to patterns and in the process of study I came across this formaton and thought it looked pretty convincing. I seek your help in my course of study. Thanks.
(please enlarge the chart...otherwise it doesn't seem to be clear)

Oxy

Hi Oxy!

Very good identification. As the previous high failed to reach the upper boundry of rectangle with surge in volume, probability of a breakdown on lower side is higher than up-side breakout.

Best Regards,
--Ashish

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