Science of Stock Price Action:
The Bull market never dies of old age or just because it has carried on for too long. All that matters – what pattern stock is trying to form. Lots of times traders make a grave mistake of ignoring a stock just because it has run up too much
Example: Bajaj Finance in Super Bull market in 2014-2015
Source: Chartalert.com
Now, this stock delivered super gains in 2016 because it formed a consolidation pattern just above 100 dma
Source: Chartalert.com
Yes – Bajaj Finance stock rallied 100% in 2016.
The lesson you can learn:
A strong performing stock will continue to perform if it keeps doing right things on the chart.
I hope you found the above chapter useful.
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