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NOTE: These articles are ONLY for education/information purpose. Anyone trading based on the views/opinion expressed in these articles are most likely to fail. Real time trading need perfect timing, right entry/exit and stoploss levels for which one can subscribe to our services of www.stoplosstrade.in (trading unit of HBJ Capital). Do not trade based on the views or opinion of anyone, trade under the guidance of experts.
Dear Readers,
If you ask me to select one stock which has gone over valued and ready to reverse the trend, one stock which has seen "buying climax" followed by sign of reversal on the next day - then it would be "Reliance Infrastructure Ltd (Live Quote)". This stock is ready to fall and one can make safe money trading in the short side of this stock future.
After a substantial bull move has already taken place in this stock, the stock moves even higher on wide spreads up. Good news, excitement, elation abounding. You observe the volume is Ultra-high (see the excessive volume). This indicates that you may have seen a buying climax (max extent of bullishness).
If at this point there are old trading areas to the left of the chart and at the same price levels [see the old high during Nov'11], this action may not be a true buying climax. At this stage we cannot be totally sure that the Ultra-high volume is mainly professional selling and not absorption of the supply [selling] from locked in traders sitting in the old trading area to the left. We have to wait for confirmation at a later stage. If there are old trading areas to the left of the chart and the market moves sideways for some time and then starts to test, this would then be a strong indication that you had not seen a buying climax but absorption volume and that the professional traders were looking for still higher prices.
What do we mean by saying waiting for confirmation?
Markets do not like very high volume on up bars because something big is happening. Either we have seen a Buying Climax which will mark the end of a rising market. Or professional money is prepared to buy stock from old locked in traders from the last previous high. This is not charity work by the money men but absorption because they are still bullish and are anticipating even higher prices. So, let us wait for Monday and if the stock falls on Monday also then the downtrend or reversal is confirmed.
NOTE: These articles are ONLY for education/information purpose. Anyone trading based on the views/opinion expressed in these articles are most likely to fail. Real time trading need perfect timing, right entry/exit and stoploss levels for which one can subscribe to our services of www.stoplosstrade.in (trading unit of HBJ Capital). Do not trade based on the views or opinion of anyone, trade under the guidance of experts.
Dear Readers,
If you ask me to select one stock which has gone over valued and ready to reverse the trend, one stock which has seen "buying climax" followed by sign of reversal on the next day - then it would be "Reliance Infrastructure Ltd (Live Quote)". This stock is ready to fall and one can make safe money trading in the short side of this stock future.
After a substantial bull move has already taken place in this stock, the stock moves even higher on wide spreads up. Good news, excitement, elation abounding. You observe the volume is Ultra-high (see the excessive volume). This indicates that you may have seen a buying climax (max extent of bullishness).
If at this point there are old trading areas to the left of the chart and at the same price levels [see the old high during Nov'11], this action may not be a true buying climax. At this stage we cannot be totally sure that the Ultra-high volume is mainly professional selling and not absorption of the supply [selling] from locked in traders sitting in the old trading area to the left. We have to wait for confirmation at a later stage. If there are old trading areas to the left of the chart and the market moves sideways for some time and then starts to test, this would then be a strong indication that you had not seen a buying climax but absorption volume and that the professional traders were looking for still higher prices.
What do we mean by saying waiting for confirmation?
Markets do not like very high volume on up bars because something big is happening. Either we have seen a Buying Climax which will mark the end of a rising market. Or professional money is prepared to buy stock from old locked in traders from the last previous high. This is not charity work by the money men but absorption because they are still bullish and are anticipating even higher prices. So, let us wait for Monday and if the stock falls on Monday also then the downtrend or reversal is confirmed.
God bless you!
Regards,
Prof. Sameer Jain [Student of Market, Sameer@hbjcapital.com]
Prof. Sameer Jain [Student of Market, Sameer@hbjcapital.com]
- Call 97189 79319 or 98864 03791 (24X7) | E-Mail: Info@hbjcapital.com to know more about our services. Also Visit: http://www.stoplosstrade.in
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