Technical Analysis using Al Brooks method

[sridhga]

In this hourly chart, we see that after failing the down side breakout of the trading range that was formed on 28th and 29th Jan, it decisively broke out of the trading range on the upside.
The spike on to the upside was well followed through for the rest of the day on 1st Feb.
However the close for the day is at a possible inflection point. Bar 49 which was the closing bar on 1st Feb, overlaps with resistance area that overlaps with bars 14 to 19 and with bars between A and B on the left side.
If the current move sustains further and crosses this resistance zone, it is likely to move towards the all time highs made earlier.
Otherwise, we can expect some pullback and consolidation at this range.

 

[sridhga]

In the Nifty Feb Future 5-minute chart of 2nd Feb., 2021, we can see that the day opened with a strong gap up. A deep 3 legged pullback on the 20th bar can be seen breaking 20 EMA line. A trade on an immediate recovery from that pullback could have given about 70 points. After that the rest of the day was a mild upward swing. The mild trend caused whipsaws during the day taking out stop losses.

 

[sridhga]

Deep Pullback setup failure in Tata Elxsi. At 10:05 am bar it suggested recovery from deep pullback. But it immediately failed. Only stop loss could save such a trade.

 

[primitivetrader]

on both the above charts the pullbacks you have mentioned are not pullbacks. this is the problem with the brooks method. he has gone deep into many stuff but has not clarified some of the basic stuff about pullbacks. he has a very different way of looking at charts but many things in his PA reading do work. either he has not explained it or (this may be more true) we have not understood it.

 

[sridhga]

Today there was a good pullback buy opportunity in Tata Consumer.

 

[rajesh.singh]

Deep Pullback setup failure in Tata Elxsi. At 10:05 am bar it suggested recovery from deep pullback. But it immediately failed. Only stop loss could save such a trade.

View attachment 45447

Couple of points while taking Deeppb, to improve Probability , in general avoid Deeppb after climactic or exhaustive move, or in the upper/Lower range of the initial spike, or after obvious 3-4 Push move as in most of the time, either trend has terminated or reversed, as Deeppb setup is trend continuation setup. In strong trend or during 1st or 2nd Leg of BO, usually it will not deep below the initial spike, this will form some where near to first spike, as you can see in the case of NF, here it dip below initial spike. Only in the case of Big gap some time we have Deeppb setup that dip below spike, but that still a valid setup due to big gap as Gap itself is spike. Also to have better edge always base your Deeppb setup at TCL, preferably a overshoot of TCL, and at some obvious S/R.

 

[rajesh.singh]

on both the above charts the pullbacks you have mentioned are not pullbacks. this is the problem with the brooks method. he has gone deep into many stuff but has not clarified some of the basic stuff about pullbacks. he has a very different way of looking at charts but many things in his PA reading do work. either he has not explained it or (this may be more true) we have not understood it.

Pullbacks are well explained in his books or videos, spl. in the chapter of Leg counts, or wedge Bull/ Bear Flag. Deeppb is nothing but can say simple ABC correction or Wedge reversals in the direction of initial trend.

 

[sridhga]

Couple of points while taking Deeppb, to improve Probability , in general avoid Deeppb after climactic or exhaustive move, or in the upper/Lower range of the initial spike, or after obvious 3-4 Push move as in most of the time, either trend has terminated or reversed, as Deeppb setup is trend continuation setup. In strong trend or during 1st or 2nd Leg of BO, usually it will not deep below the initial spike, this will form some where near to first spike, as you can see in the case of NF, here it dip below initial spike. Only in the case of Big gap some time we have Deeppb setup that dip below spike, but that still a valid setup due to big gap as Gap itself is spike. Also to have better edge always base your Deeppb setup at TCL, preferably a overshoot of TCL, and at some obvious S/R.

Thank you for feed back and suggestions. Will try to incorporate these.

 

[primitivetrader]

Pullbacks are well explained in his books or videos, spl. in the chapter of Leg counts, or wedge Bull/ Bear Flag. Deeppb is nothing but can say simple ABC correction or Wedge reversals in the direction of initial trend.

ya, it has been explained both in his books as well as the course. but he is not clear and made it unnecessarily complex., in fact, that is his way of looking at the thing nothing against him everybody has different ways.
secondly, whether pb has one leg 2 legs or multi legs or deep is not relevant for me. what is imp is the basic PA reading (which as a whole I feel he missed big time) which he has missed big time as per me. this is my personal take. whatever one finds good and workable is the best.

 

[sridhga]

Nifty has formed an upward channel on hourly charts from 12:15 pm on 02-02-2021. It has then hit ATH on 3rd. Later the channel is broken to the downside. So now it seems to be consolidating. Below is the Feb Futures chart.