First of all Happy Holi to everyone,hope every body enjoy playing with "other colors" apart from our daily favorites, green and red!!!
Friday was the budget day and as always it was a volatile day,reasons are quite simple, a lot of economic and industry specific news is released in very short period of time while the market are open.
I am attaching three charts :
IFCI - went up all day
ITC - went down all day
DLF - went up and lost ground at much faster pace
I feel these were nice intraday movements and are quite good to test your intraday system.While the news flow is heavy on budget day,tracking, analyzing and reaction to every piece of news is impossible.Price movement is our most reliable tool in this case ,as always.I would like you to test your intraday trading system base on these stock price movement.It will tell you whether your system is more of a leading or lagging in nature.It will also give you important insights into your own psychology of how you tend manage changing market conditions.Try to imagine how you would have traded in these three stock that day.As history repeats itself(one of the basic principles on which technical analysis is based) it will make you better prepared the next time you witness such a volatile day with divergent stock price movement
Cheers.
IFCI
ITC
DLF
hi'
ReplyDeletecould you please tell me what dlf's budget day intraday chart suggests????
thanks
Shazia
Hi Shazia,
ReplyDeleteWell simple answer is I dont know...Thats how it is...thats the nature of this stock....its high beta so it rises and falls at a faster rate than market.
That day market first rose so Dlf went up at a greater rate than market ...and when market corrected ...it cam down at a faster rate as well
It has been in long term (2-3 months trend) down trend so down moves are at faster pace(high momentum)
Reasons can be many or any!!...but what is more important to short term trader is can he handle this volatility...has he got a system that will be profitable in this scenario? Should he trade in this kind of a day?
Answer to above question can significantly improve trading profits in his/her trading career
Cheers
hi,
ReplyDeletethanks for your reply.
i got cleared of some doubts as to why it fell so much.. the momentum story fits well.
thanks
Shazia