It had been a verrrrrrrry verrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrry long time since I had posted any content in the website. I am planning to share my trade analysis when ever I find time in my website.
This analysis basically will be useful for traders who already knew the concepts of VSA and Volume profile, and it will be very helpful for my students who have learnt these concepts from me.
Ok ! Let us start with today’s stock which gave nice profit for us for the day.
LICHSGFIN : LIC Housing Finance was in a steady uptrend. As we all know I will always follow 30 minutes time frame for analyzing the trend and the context of the stock.
We can see from below image that the stock is in uptrend for almost a week. We are not going to trade against the trend.
Trend is our friend
Having say that lets break down the smaller time frame. Ah ! one would have a doubt how the hell the trend would continue today ? What is the assurance ?
- Is there any anomaly in the market ? No
- Is there any huge volume disruption against the trend ? No
Then why would i fear that a stock would go down. As there is no evidence of such adverse move against the existing trend, I was waiting for an opportunity to go long.
Now look at the above image. At point 1 in the first 10 mins stock tried to break above the trend line but after breaking we see lot volume in the opposite trend. One would think to go short as the stock did not go high despite the effort it made. as the time proceeded we can see the downward volume started to decreasing which shows there is no interest from the sellers in taking the price further. A point to be noted.
Later on at point 2 you can see stock trying to break the trend line. Look at the effort it made to break the trend line, point 3. It is huge when compared to the recent volume bars. But on the contrary the effect is adverse, the stock is falling. Even when it is falling look at the volume again it is blue in color which is nothing but the volume is less than the half of the average volume. which shows the sellers is not taking the advantage of the down move. Finally at point 4, stock took its final leap to the down side. A small volume was involved in pushing the stock But it failed when we that from next candle reversing with an ease.
One thing you have to note here is stock did not meaninglessly wander down and reversed. Instead it took support exactly the volume peaked for the entire day, point 6. I have drawn a green support line to denote this. Stock just reversed and we booked a nice 5 point move.
And the profit I booked is here.
I hope you all enjoyed the calls given in my telegram channel. If you have any doubts mails or message me in telegram. Lets meet in one more analysis.