Indian stock market price action explained.pptx

Learn how Indian stock market price behaves and the price action that you may see.

1. Price behaviour “ Price is nothing but an outcomes of buyer’s and seller’s behaviour

2. What is Price Action ? Price action is nothing but understanding , how the price is behaving at a certain important level Price action is simple looking at the past data , in order to predict the future It refer’s to understanding who’s is stronger , the buyer or seller ? Who’s is getting trapped ? And just common sense NOTE – “ Price action on it’s own is very vague , you need handy tools to execute “

3. SUPPLY AND DEMAND ZONES SUPPLY ZONE AN AREA FROM WHERE EXTREME SELL OFF TAKES PLACE IS CALLED A SUPPLY ZONE. DEMAND ZONE. AN AREA FROM WHERE EXTREME BUYING TAKES PLACE IS CALLED DEMAND ZONE. NOTE: THEY ARE SIMILAR TO SUPPORT AND RESISTANCE LINES BUT INSTEAD OF A SINGLE LINE IT IS MORE OF A ZONE.

4. SUPPLY ZONE AN AREA FROM WHERE EXTREME SELL OFF TAKE PLACE. WE EXPECT WHEN PRICE AGAIN REACHES NEAR SUPPLY ZONE WE MAY SEE A SELL OFF AGAIN. PSYCHOLOGY: SELLERS WHO MISSED THE PREVIOUS FALL WAITS FOR THE PRICE TO COME TO THE SAME LEVEL AGAIN TO START SELLING OFF.

5. DEMAND ZONE AN AREA FROM WHERE EXTREME BUYING TOOK PLACE. WE EXPECT WHEN PRICE REACHES NEAR DEMAND ZONE WE MAY SEE BUYING AGAIN. PSYCHOLOGY: THOSE WHO MISSED THE PREVIOUS RALLY WAITS FOR PRICE TO COME BACK TO MAKE POSITIONS.

6. Supply and demand zone

7. Simply... Demand/Supply zones are nothing but extreme zones where sell-off started (supply zone) Demand Zone is an extreme zone where buyers pushed prices up.

8. Demand zone

9. Supply Zone

10. Supply zone

11. DEMAND ZONE

12. Hourly time frame

13. NOTES WHEN A SUPPLY ZONE IS BROKEN IT TURNS INTO DEMAND ZONE. WHEN A DEMAND ZONE IS BROKEN IT TURNS INTO SUPPLY ZONE. WHEN PRICE REACHES FIRST TIME TOWARDS THE SUPPLY AND DEMAND ZONE WE EXPECT THE PRICE TO FALL OR RISE SIGNIFICANTLY FROM THE ZONE BUT WHEN THE PRICE KEEPS ON TESTING THE ZONE IT BECOMES WEAKER.

14. Bank nifty , hourly TF

15. GAPS

16. WHEN A ZONE IS TESTED MULTIPLE TIMES IT BECOMES WEAKER

17. Range Contraction

18. Range contraction Remember one thing , market moves from low volatility period to high volatility period Market never moves in a constant volatilty Every high volatile market is followed by a low volatile market The big move happens in the market , usually after a low volatility period The low volatility period leads to a tight range in the market The tight range in the market suggests balance between buyer’s and seller’s

19. RANGE

20. Range in Stock Market. In stock market , prices are said to be in a range when buyer’s and seller’s are fighting it out , and not able to go on either side with full swing. In such cases , prices narrow down in a defined range as it struggles to make a clear decision. This is basically known as consolidation where in prices stay in a defined range. A range denotes balance in the market Remember every consolidation lead’s to a Big Move. Henceforth we wait for the market to come out of the narrow consolidation to enter and capture the big move on either side ( BUY / SELL )

21. Supply / demand zone and range contraction

22. SIMPLE LOGIC TO FOLLOW Remember one thing , when a resistance is tested a multiple times it becomes weaker And when a support is tested a multiple times it becomes weaker WHEN A SUPPORT IS BROKEN , IT ACTS AS A RESISTANCE When a resistance is broken it acts as a support And a breakdown of this level usually leads to a good parabolic one sided move Identifying a tight range can give some amazing profit’s

23. Multiple retest at resistance

24. SUPPLY ZONE HIGHER HIGHS SAME LEVEL BEING TESTED AGAIN AND AGAIN

25. Multiple retest at a support ( Buyer’s getting exhausted )

26. LOWER HIGHS DEMAND ZONE SAME LEVEL TESTED

27. BAJAJ FINANCE

28. BAJ FINANACE

29. TITAN

30. What really goes behind a breakout ? What really happens when the market is inside the range ? When the market is inside the range , both buyer’s and seller’s are in a very comfortable position They’re in balance of the current scenario Once the breakout happens, one of them start’s to Panic.

31. BREAKOUT

32. BREAKDOWN

33. Possible outcomes after a breakout A clear breakout A good retest A continuation breakout Simple a fake out

34. How to improve Chart Analysis Skills

35. Outcomes of breakout’s

36. Another probable scenario

37. Types of range To be frank , it’s silly to name a range breakout setup as range can be of any type on the chart ( we will see it on the live chart ) Range simple means contraction in volatility leading to prices narrowing down to a tight range Such tight range represents balance in the market , where both buyer’s and seller’s are comfortable. However once the range is taken out , one of them is trapped which leads to one sided ( Panic / euphoria ) move. The more time the market spends in a range , higher are the chances for the market to give a strong breakout.

38. Other types of range

39. Types of market structure

40. Market structure - View on a stock The beauty of the market structure is that it helps you in determining the view on a stock If the stock is bullish , you look for buy side opportunities , if a stock is bearish , you look for sell side opportunities , as simple as this Your view matters a lot , it cuts most of the noise and gives you a clarity of thoughts

41. Always ask yourself ? Where is the stock trading ? Breakout of a range At a supply zone or demand zone In a sideways range

42. HOW DOES A TREND MOVE ?

43. Move , pause and move A strong trend is usually followed by a good pause This pause is nothing but consolidation It is the correction , that we see in an uptrend or a downtrend This phase is nothing but a simple consolidation , where weak hands are moved out The pause is like a petrol pump , where the car stops , fills the tank and then moves ahead with momentum These pause are considered to be healthy for a strong trend

44. Recent example of Nifty bank

45. RELIANCE

46. GODREJ CONSUMER

47. Price behaviour No doubt , Prices are moved by Supply and demand zone , However drawing a supply / demand zone and actually trading them are two different things Hence forth analysis is fine , but having an entry trigger and entry system is of utmost importance.

48. Four important data point’s Open Low High and close

49. Basics of technical analysis – “ Candlestick ’’

50. Let’s go have a look at candlestick on a chart We will use trading view software for the purpose of charting. Let’s compare candlestick pattern with other options available on a chart. You must have noticed candlestick pattern reveal so much information.

51. Bullish candle stick patterns

52. Bearish candles

53. Location comes first , and then candlestick Formation of candlestick at important areas of supply zone , demand zone and value area is the key , and not randomly on the chart