Technical Analysis Using Simple Charts

karthik_sri

Well-Known Member
#11
but the overall purpose of this thread is not just volume analysis but to analyse stocks using as little tools and lines as possible. Lines, indicators etc are nothing but noise on the charts. In the past, traders didnt have 100s of indicators and thousands of lines criss crossing their charts. all these are only recent phenomena which seems to only confuse the trader even more.

If traders in the past could trade successful with not even a proper charting software, it just shows that naked charts are the way to go !
Well said Beagle, waiting for your Charts & Analysis!:)
 
#13
here is another chart with Fib extension. The Fibo was drawn at the end of last year and you can see how the extension levels have acted as good regions of support and resistance. The latest resistance being the 1.5 level which is now acting as resistance and leading to a correction today.

Now the 1.382 level of 9380 is likely to act as support tomorrow. Easy, isnt it?

 
#14
here is another chart with Fib extension. The Fibo was drawn at the end of last year and you can see how the extension levels have acted as good regions of support and resistance. The latest resistance being the 1.5 level which is now acting as resistance and leading to a correction today.

Now the 1.382 level of 9380 is likely to act as support tomorrow. Easy, isnt it?

and as mentioned yesterday, it did act as support and we have the bounce today...:)
 
#16
so now we have seen some very basic charts...we are now going to combine this with volume. when you do that, you need to be very careful with your data provider. Most of the data providers do not provide correct volume data. They either give junk as volume or they take the feed from BSE where it is more noise than volume.

So, make sure that your provider provides the correct volume data on MT4. once u have the volume data, there is a lot of analysis that you can do. You need to learn to read the volume and then try to interpret what it is saying.

I will present some charts with volume and tell you how i interpret it. I would welcome questions in this thread as sometimes it gets boring doing a monologue.
 
#17
below is a chart of the Nifty with a bar marked. as you can clearly see, the bar has large volume. Generally bars with large volume tend to be very long. This is natural as there is lot of buying and selling taking place and so as the sells go in search of the buys, they need to go lower and lower to fill their orders. This extends the bar.

But here, you see that the bar is short though the volume is very high. This means that there are a very large number of buys sitting in this region. The number is so huge and that as more and more sells happen (as proved by size of volume), they have been met with buying with very little change in price. This is a classic sign of buying. We also see that the region falls exactly in a Fib support region. So, all signs are there. You have a short bar, a large volume and price sitting at support. A classic buy. And you see that the NIFTY took off from the next day and has not returned to this region since. A gigantic move.

 
#18
another one (i am just choosing stocks randomly, if you want me to choose specific stocks, lemme know). This is of ITC. Look at the long bar marked B. Both the price bar and the volume bar are long and the price closed well off the highs of the day. this shows that there was a lot of activity (marked by large volume), the buyers kept buying and the price moved higher and higher in search of more sells. But then some huge amount of selling came in and that is why the stock closed well off the highs. Now you notice that the price range (marked by the top of the bar) has been acting as resistance ever since and the signs of this selling was shown in March itself (when bar B was generated).

 
#20
Hey, can you please show some charts on how you select the two swing points to draw Fibo extension?
Thanks for asking. i always choose the last big swing to draw the Fib and i always draw it in the direction of the trend.

So, if the last price swing was from up to down, i place the starting point (when i draw the fib) as the bottom of the swing and take it up to the top point of the swing. Please see attached chart where the last swing was upwards. So i start at the bottom and then move to the top when i draw the Fib. vice versa for a swing down.

 

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