Short

Updated

SBIN Analysis

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Price has breached the horizontal trendline but our bias is still strength to the upside once price breaks the channel.

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The RSI reading shows price hovering around the 50 percent zone. Therefore, the breaking of the horizontal trendline is a false breakout. In Wyckoff methodology, people can regard this move as a spring.

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The break out of that channel line would suggest a sign of strength entering the market.

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Now we have a triple bottom. Market rejected price to the downside and the end result was an engulfing candlestick pattern. Demand has entered the market.

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The price must break out of that channel line.

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Some people might find it strange why my analysis is bullish. Henceforth, I shall give my foresight on this issue.

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In general, the medium term sentiment of the market is bullish. How do we know this? Look at the chart and notice the uptrend between the 10th of May and the 27th of May. Therefore, I regard the choppy move to the downside as corrective.

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Strange the comment section came back up again. Nonetheless, I want to make a clear distinction. I'm not using the Wyckoff method to trade. Instead, I used a small element of the Wyckoff model to come to the conclusion of a bullish market set up.

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I have now drawn a horizontal trendline to give a much better perspective on the market. Price is ranging in this area. I placed the upper horizontal trendline on the 10th of June rather than the 11th of June because price respected this zone on the 13th of June. Notice how price never went that trendline.

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I was meant to say price never went above that trendline. There are two options where you could possibly place an order. The first choice is where price passes through the parallel channel line. The second choice is a breakout trade of the horizontal trendline. The first option is more aggressive while the second option is more conservative. Remember this is my opinion, I'm not advising anyone to take a trade.

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Excellent the market has broken out of the channel as predicted and is a good position to go long. Remember this is my opinion, I'm advising anyone to take a trade.

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Those two bearish candlesticks that had a long wick were the telltale signs of supply absorption.

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The engulfing candlestick is a demand bar and it stop hunted sell orders at the top.

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You might question how to run this trade. I would move the stop loss each time the market makes a proper higher low structure.

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Remember you need to piece all the jigsaw puzzle to complete the picture. Even when the trade is unfolding you should look for clues in weakness. This was a typical example of how RSI traders would analyze an instrument.

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Price broke through that resistance with a nice strong big candlestick. The market is making a slight retracement but the price seems to bounce off the horizontal trendline.

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The next resistance area is 357.20, however, the most important zone is 364.25. If price breaks through that zone then it will move quickly to the upside.

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This is the Daily Chart of SBIN. Look how price respected the pitchfork trendline. Alan Andrew in his book advocated that price will often hover around the Median Lines 80% of the time.

Since the lower ML has been tested and has proven to be a strong support zone we can make a good case that price will go toward the middle ML (conservatively) and to the upper ML (aggressively). The black line is a technique I use mentioned by some pitchfork traders as a time element for price reaching a target. Remember this is my opinion, I'm not advising anyone to take a trade.

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The market has made further gains.

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It has to make a HH and HL for us to consider moving the stop loss.

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The market is going to test that resistance area 357.20

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The market has found short term resistance as we can see on the RSI reading. We need to see a good impulse leg breaking through that horizontal line.

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In my opinion, the market will punch a hole through that resistance and then consolidate in the short term before continuing on the uptrend.

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I would now put my stop loss on break even. We can now relax and see if it reaches our target. Look at the pitchfork chart to see how we came to this conclusion of the price target.

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The market price action was predicted correctly.

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You would have been stopped out if you moved your stop loss on each HL trough. In this case, it was 358.55

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This would have at least give you a 1:1 R

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However, more aggressive traders would have put the stop loss on break even and be patient for the market to continue its trend. Why? Look at the Daily Chart when Andrew Pitchfork was drawn. Price still has room to move up.

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For those who kept the trade will now see price ahead toward the target as highlighted in the Pitchfork chart.

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Some people might be confused. The heading says SBIN short. This was a mistake on my part. I was meant to write SBIN Long. Nonetheless, if you read my commentary then this should clear this misconception.

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I would terminate this trade. Price is out of range from the pitchfork and is violating the lower trigger line. Unfortunately, it didn't quite reach the time zone in the previous chart. But you would have still made some profit.

Trade closed: target reached

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This will be my last post on this trade

oaa37

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