Understanding Retracements????

I have been following a few momemtum stocks e.g. GDL, DRL, BEML, IDFC, SAIL, ESCORTS,..... However, I happen to enter the stocks, the day it shoots up mostly at higher levels. Then it starts retracing at higher leveles for a few days, which I find unable to hold. Again it starts shooting its second leg. I would like the seniors to guide me about retracement levels in simple language...........................................

To understand retracement you have to understand that stock prices never move up or down in a straight line but generally reverse or "retrace" a portion of the previous movement before resuming their underlying trend in the original direction.

Thus a retracement is a countertrend move!

There are many different ways of establishing possible retracement levels:

Retracement levels could be previous levels of support or resistance, current moving averages or percentage retracement amounts.

Dear Traderji,

Nice to see you participating after a long time.

Rgds

Rahul

I am always available. Just PM me and I'll be there!