Is it the right time to buy Ashok Leyland shares?
Being the first share of my life, It has been my friendly stock so far. It was a short in this October series. The short is closed and we are right now waiting to buy it.
Fundamentally, it is a right stock to buy and hold. But we must select the entry technically. The lower the better. Although one is still in profit who bought NIfty futures at the peak of 2008; but technical entry leads to better profitability.
This is the original article shared on Slack on Sept 27.
Main Idea Link: https://in.tradingview.com/chart...
Technical Summary-
https://www.tradingview.com/x/sYGsyaak/
Look at the current formation of candles. Let’s think as a seller as we want to forcefully buy it. If I am a seller I will have the stop loss placed each day mostly at the previous day’s high.
Similarly, if I am a buyer, I will put my stop loss placed each day mostly at the previous day’s low.
https://www.tradingview.com/x/yXFD3qXS/
So thinking psychologically, all longs have already exited on the day when it fell massively or we can say did a flash crack. But if you follow the candle marked here (the green one) broke the high of last day which was a red candle.
It means shorter will book the profit too. Rest candle fell into cards. With volume decreased, there is no money inflow into the stock. So there is no breakout or breakdown.
But time compression deals with impatience. Either one of them has to happen and it will be very strong considering the timeline of a few days of inside candles.
It sums up to -
- Short if it breaks the low of the previous day with a stop loss at the previous day’s high.
- Long if it breaks the high of the previous day with a stop loss at the previous day’s low.
Support and Resistance for October Series-
Rising crude oil means the negative effect on the auto industry; that’s why the upper resistance of 135 is anyways staying strong even before the NIFTY meltdown.
105, we can tell is acting as support.
What happened next?
Carnage.
The short target is reached. You can see the power of technical analysis here. It reversed pretty sharp from the support.
Now if the low of the candle breaks. It means the support level is broken and it will not be a right time to buy. But there is fear of missing out! What if it goes huge up tomorrow, you will lose making money.
But losing the opportunity to make money is not at all bad considering you’re losing the opportunity to lose money too!
