Science of Stock Price Action is derived from Laws of Nature and Physics.
One of the old saying based on simple observation of nature: Birds of a feather flock together. It means stocks belonging to the same sector or group tend to behave in the same way. If we apply this in financial market – it translates into stocks of the same sector move together.
Let me share one illustration: Tyre stocks in Feb
I covered this trend way back as a Live Case Study @smarketpremium.com: Apollo Tyres and Ceat at 200 dma
1. Apollo Tyres at 200 dma in Feb 2017
Source: Chartalert.com
2. Ceat at 200 dma in Feb 2017
Source: Chartalert.com
3. JK Tyre at 200 dma
Source: Chartalert.com
It was a great opportunity…the stocks were all set up for a good bounce and see where they are 5-6 months later –
Here’s What Apollo Tyres stock did –
Source: Chartalert.com
Here’s what Ceat Tyres stock did
Source: Chartalert.com
Here’s JK Tyres stock did
I covered both Apollo Tyres and Ceat when they were at 200 dma
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers