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Jindal Stainless Hisar - Positional trading
This is a positional trade idea where I have applied the principles of Stan Weinstein of price structure, volume, relative strength and 30 weekly moving average. This form of trading needs some patience and is suitable for those who may not have the time to watch charts each day.
Sector Structure- The first step is to watch the sectoral index i.e. Nifty Metal index. This gives a bird's eye perspective of where the sector is structurally. Do not enter a trade if price is below 30 MA on Weekly chart or in a LH LL structure.
Stock Structure- JSL Hisar is in Stage 2 structure with price above 30 weekly moving average and the latest weekly candle has broken prior resistance decisively with a strong body candle and volume expansion. It indicates strong demand.
Pattern- A variation of cup and handle pattern can also be seen which represents volatality contraction.
RS- Relative Strength (not RSI) is a measure of strength and performance of stock against the whole market or a particular index. In this case RS has outperformed the CNX Metal index.
Risk- It is important to have a clear idea as capital protection is key in trading. It is also important to recognize that different traders have different risk appetite. Positional trades give the stock room to breathe and retracements can often be anything from 15 to 20%. Therefore, it is important to find the right entry price. Here, it is important to note that CNX Nifty 50 has been in a heady upmove since March 2020 and in the eventuality of retracement in the broader market i.e. CNX Nifty 50, all sectoral indices are likely to move lower. Nifty 50 is in a stage 3 structure and is ranging sideways for some weeks. Hence, to protect capital, my first stop loss will be the low of the Daily candle of 22 July where I will exit 50% and the second stop loss where I will exit the balance 50% will be the 50 Daily Moving Average on Daily chart- this is a slight variation that I have learn't from my guide.
Entry strategy - 25% at the weekly candle of 19 July and adding on as price retraces. This gives better risk reward ratio. But important to remember the risk mitigation strategy.
The idea in positional trading is to be with the trend till any of the risk factors mentioned above are violated.
Disclaimer- I am not a certified investment advisor or a chartist. This is not a buy or sell recommendation. The purpose of sharing this post (my first one) is to learn from the community members and experts in the group.
Sector Structure- The first step is to watch the sectoral index i.e. Nifty Metal index. This gives a bird's eye perspective of where the sector is structurally. Do not enter a trade if price is below 30 MA on Weekly chart or in a LH LL structure.
Stock Structure- JSL Hisar is in Stage 2 structure with price above 30 weekly moving average and the latest weekly candle has broken prior resistance decisively with a strong body candle and volume expansion. It indicates strong demand.
Pattern- A variation of cup and handle pattern can also be seen which represents volatality contraction.
RS- Relative Strength (not RSI) is a measure of strength and performance of stock against the whole market or a particular index. In this case RS has outperformed the CNX Metal index.
Risk- It is important to have a clear idea as capital protection is key in trading. It is also important to recognize that different traders have different risk appetite. Positional trades give the stock room to breathe and retracements can often be anything from 15 to 20%. Therefore, it is important to find the right entry price. Here, it is important to note that CNX Nifty 50 has been in a heady upmove since March 2020 and in the eventuality of retracement in the broader market i.e. CNX Nifty 50, all sectoral indices are likely to move lower. Nifty 50 is in a stage 3 structure and is ranging sideways for some weeks. Hence, to protect capital, my first stop loss will be the low of the Daily candle of 22 July where I will exit 50% and the second stop loss where I will exit the balance 50% will be the 50 Daily Moving Average on Daily chart- this is a slight variation that I have learn't from my guide.
Entry strategy - 25% at the weekly candle of 19 July and adding on as price retraces. This gives better risk reward ratio. But important to remember the risk mitigation strategy.
The idea in positional trading is to be with the trend till any of the risk factors mentioned above are violated.
Disclaimer- I am not a certified investment advisor or a chartist. This is not a buy or sell recommendation. The purpose of sharing this post (my first one) is to learn from the community members and experts in the group.
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