Day Trading Guide

May 23, 2011:  

DLF

Fresh long position can be initiated only if DLF climbs above 227 levels with tight stop-loss.

ICICI Bank

Initiate fresh short position if the counter drops below Rs 992 levels with stiff stop-loss.

Infosys

Make use of rallies to sell the stock while maintaining tight stop-loss at Rs 2,852 levels.

L&T

Contrary to our prior view, the stock declined in the last trading session. Initiate fresh long position only if the stock reverses up from Rs 1,600 levels with tight stop-loss.

ONGC

We recommend a sell in the counter with stiff stop-loss at Rs 272 levels.

Reliance Industries

Fresh short position is recommended only if the stock dives below Rs 895 levels with stiff stop-loss.

SBI

Negating our prior view, the stock fell in the last trading session. As long as the stock trades below Rs 2,276, the near-term stance remains negative. Fresh short position can be initiated if the stock reverses down from this level with tight stop-loss.

Tata Motors

The stock declined three per cent accompanied by above average volume, penetrating its 200-day moving average on Monday. We recommend a sell in the stock with fixed stop-loss at Rs 1,145 levels.

Tata Steel

The near-term outlook is bearish for Tata Steel. We recommend a sell in the stock with stiff stop-loss at Rs 567 levels.

Nifty Futures

On Monday, Nifty tumbled 1.8 per cent witnessing selling pressure. Initiate fresh short position if Nifty Futures fails to move beyond 5,424 levels with tight stop-loss.

Keywords: technical analysis

4 Candle Formations Can Be Used With Great Success

Pin: The pin formation is one of our favourites; it shows huge emotion of the market indicating a sign of a reversal. In the case of a bearish pin the bulls pushed the market high but failed to hold it, so price returned back to around the open leaving a pin formation. The pin always points away from where price may be heading.

Engulfing: An engulfing candle is a strong change in momentum in the market often seen from bounces off support/resistance areas. For a buy confirmation the first candle would be red followed by a green candle that
completely engulfs the previous one. For a sell confirmation the first candle would be green followed by a red candle that completely engulfs it.

Railroad Tracks: Railroad Tracks are very similar to engulfing candles except they usually close at the same level as the previous candle (within a few pips) instead of engulfing it. This forms two candle bodies which look like a railroad. We introduced this into our trading in late 2010 after seeing this formation over and over
and noticing its power.

Doji: The Doji is generally a small candle indicating a period of indecision with not much movement, the open and close should be almost at the exact same price but it is acceptable within a pip or two. Out of the 4 formations we find this one the least powerful, we prefer to see 2 or 3 Doji’s in a row before we sit up and consider a trade.

More formulas and strategies are welcome from your side. You can send Metastock, MT4 and Amibroker formulas or trading strategies tostockmaniacs@ymail.com. If we think the formula or the strategy is worth publishing the same will be published here. If possible also send your screenshot of the indicator.