IN THE SHORT TERM STOCK MOVEMENTS ARE GOVERNED BY MARKET SENTIMENTS & POSITION OF BIG PLAYERS. IN THE LONG TERM STOCK MOVEMENTS ARE GOVERNED BY COMPANY PERFORMANCE AND ITS FUNDAMENTALS.
Below are few tricks and strategies based on my experience that I follow before taking my trading decisions-
If the high price of the entire week is achieved on Friday, expect higher prices next week.
If the low price of the entire week is achieved on Friday, expect lower price next week.
In a highly uptrending market weekly low’s is achieved on Tuesday
If market is in strong down trend (if main trend is down), the weekly highs are generally achieved on Wednesday.
When the price crosses the high of the last four weeks, it’s an advance indication of higher prices.
When the price breached the low of the last four weeks, it’s an advance indication of lower prices.
In an up trending market if the prices breaks the 30 DMA & remain below it at last for 2 consecutive days, it tells us of a much more great correction and vice-versa.
If the market rises for 5 consecutive days, there is a high probability that correction will last for 3 days. (Ratio is 5:3)
When the price starts rising from a particular level, Rs.100 or 100% rise whichever is earlier becomes a strong resistance.
When price crosses the high of the last 3 days it tells us about more higher prices on the 4th day. (Traders can buy it on the 4th day and place a SL order Rs. 3 below the last 3 days high) (vice-versa).
If subsequent correction is greater than the previous correction both in terms of price & time magnitude, this is an advance indication that trend is changing
50% of the last highest selling Price is the strong support area. Any stock which is trading below this 50% level is not the useful for Trading
If a price is rising for 9 consecutive day’s at a stretch, then there is highly probability for a correction for 5 consecutive days. (Ratio is 9:5)
Don’t ignore a double bottom & triple bottom signal on a monthly chart, after a minimum gap of 6 months. ( advance indication for mid term investment)
Don’t ignore a double top & triple top signal on a monthly chart, after a minimum gap of 6 months.(Not the right place for investment / entry, price may fall)
Hope this article will help you to take better trading decisions.