Re: Aftek Info
2/3rd of the breakouts will pull back and usually they take support at breakout level. Pullbacks does not negate a breakout. One needs to keep an eye on the volume of pullback and volume at the time of breakout and immediately thereafter to understand the strength of pullback.
There are two type of breakout traders in the market as well, one who enter immediately after the breakout and others will wait for pullback and both of them earn money in markets.
Thanks for quick reply. Please help me understand more on "support at breakout level" taking example of Aftec info. What should have been its support level after b/o on 17.08.06 ? Yes, b/o on 17.08.06 was well supported by huge volumes. How would you rate volumes on pullback in this particular case ? Although it closed higher today, it was not well supported by volumes.
Will you consider this b/o as a strong and valid one ? Also, would you consider taking a position NOW ? What other factors to consider apart from b/o to enter a trade like this ? (particularly when there is a strong pullback - latest is 61.8% on Fibonacci scale). Is it not still range-bound as it is yet to cross 66 (latest peak)?
I reanalysed this stock after reading your post. Found more than a couple to things favouring Winstonn's analysis as below.
1. I guess you are a strong user of RSI on which, this stock is extremely bullish.
2. Also, it is taking support at 13 day EMA everytime at pullbacks after 01.08.06 (as it did y'day) which is a good sign of a healthy uptrending stock.
3. It is also making higher tops higher bottoms since 01.08.06.
3. Most importantly, its weekly trend is still up which means that every pullback gives us an opportunity to enter a trade.
I think by the time Winstonn see my 1st post, he will not have to take trouble justifying his position. I have done half of his job already
But I am still not 100% clear and convinced. I will definitely pass on this trade as I have not understood it 100%, but would like Winstonn (or like-minded others) to enlighten me with their rationale which will definitely widen my horizon.
Now my last question is, should we consider support / resistance levels and major trend as well ? What about current resistance at 66-67 and trendline falling near 75 ? Or just be cautious and tighten your stoploss when prices come closer to extreme resistance level ? Or wait for the prices to close above its major resistance ?
Just trying to analyse how experts see the things differently.
Thanks in advance.