i was told to do some postmortem technical analysis on some of the 30% and above market / stock crashes but thought of posting here as it may help in crisis management during potential market/stock crashes . We never know when we are in the middle of a crash until after it actually happens.. some interesting facts that i noted in all three of them.
June 2006 :-
Above avg volumes recorded on down days before the crash happened.
ADX stays flat to down . ADX rising after the down trend started(which always happens whenever there is a strong trend in either direction up or down).
Bearish engulfing at the top of a significant uptrend.
By the time EMA could track the downtrend the market had already seen a 10% correction.
It was MACD that could identify the reversal only to be followed by the ADX later...
IFCI :-
Gap got filled due to the volume which was clearly higher after the gap than before it..
Rpl :-
Trend line was broken intraday at 267 which we should be in a position to identify apart from the open interest picture in RPL on which i have already spoken in karthicks thread..
All the reasons for crash are completely different from each other but just shows how vigilant we should be..
did this for a research house but it helped me more than the house iam now writing for......also heard someone stating that MACD is not useful but just goes to show the impotant role it played in identifying the 2006 reversal(also MACD still it helps me in identifying key market/stock reversals).
satyam will fill the gap(between 430-433) in the next minor reaction if the volume doesnt pick up in the coming days...
Bought Dlf towards yesterdays closing for reasons posted in the chart
Asish,
satyam opened with a gap on dec 24th opening ( as visible in the chart in my previous post)...... in DLFs case its not a gap its a asc triangle b/o.
iam holding DLF but closed half my positions at 1086 and will hold remaining for a target of 1150 if 1050 is not breached.
Also added to my existing positions in canara bank(gave a good b/o today)...
Asish,
satyam opened with a gap on dec 24th opening ( as visible in the chart in my previous post)...... in DLFs case its not a gap its a asc triangle b/o.
iam holding DLF but closed half my positions at 1086 and will hold remaining for a target of 1150 if 1050 is not breached.
Also added to my existing positions in canara bank(gave a good b/o today)...
