Hey folks, this is how you should have traded today’s chart.
‘P’ stands for ‘Previous Day Close’. Today the stock opened gap up and the first candle was a Doji. Immediately the stock fell and took support at ‘20 Day Exponential Moving Average’, which happens to be the thin pink line that is not shaded.
Experts say gap gets filled. And this happened today. The stock opened gap up and later the gap got filled.
After taking support at the 20 EMA the stock hit the resistance, which happens to be the yellow line in the image above.
‘M’ stands for ‘Manipulation’. The big players took the market above and retail traders who went long got trapped as the stock collapsed after manipulation. At that particular point the sellers were more than buyers and yet some went long. This stock had moved big yesterday and many probably felt the same today. The stock was up over 3% at the time of manipulation.
Later the stock went below the resistance and long traders’ stop loss hit. The stock later penetrated 20 EMA and made red candle. The second red candle or ‘1’ was the place to short. And the Stop Loss (SL) was above the previous red candle ( just above 20 EMA ). The target was at ‘2’ which happens to be the Pivot. On the journey to ‘2’, there were green candles at mid way, if you got scared seeing it, then you could have bought back half the quantity that you shorted and wait till the target to buy back the remaining.
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