Identify Lagging Stock and Moving Stock

                    We know most of the time stock moves without showing any trend or momentum. The are moving just sideways or little upward or downward direction. At that time Stock is just lagging, moving. The stock Moving without Volume, without strength, without any target, without any moment.
                    Some stocks are Moving Upward or Downward with high strength and Volume. These stocks are trending. They are Moving to a particular direction with high volume and aim to reach a particular price level.
Here we are analyzing the nature both of lagging and moving/Trending stocks. We are trying to find trading opportunity on that.
In the above picture depict intraday chart of price moving pattern. In this chart, Price goes through two stages.

  • Lagging stage
  • Trending or moving stage
                     Price were Moving sideways with little downward slope. The strength of the move is very weak and there is only little price volatility in first stage. Volume may be very low. But at some point of time, The stock gained some strength and starts moving upward direction. Price movement was 45 degree slope indicate the high strength of the move and may continue to more upward direction.
Here is the main difference between Lagging stock and trending Stock that helps to identifying it b


Lagging Stock
Trending Stock
Moving Sideways or Little upward, Downward Direction
Stock have clear direction either up or Down
Price Moving slope / Trendline Slope will be low degree
Trendline have high degree of slope
Stock will be within a Very narrow range (channel)
Price not be in a range. It is moving towards a direction
Stock Moving Very Slowly
Price movement is relatively faster
Price often consolidate after big move
Price Starts Trending after sideways consolidation
Volume will be very Low
High volume will be traded
False breakout may happen that leads to wrong trades
Already Price is in out of any price range
Price may be already at it’s accurate value(so Price need not to move to a certain price level)
Price Move because it is Trying to find it’s accurate fundamental value (So it is Moving to find to attain a certain Price level)
Price need not reach to any price level
Price is Moving to reach a certain Price Level
Only small candles can be seen. Big Candle can not see
Big Caldes can be seen regularly either Red or Green
Price often lag before any major news or corporate, Policy announcement
Price starts trending after major news, corporate, Policy announcement
No Trading Opportunity at this stage
Find Good entry point

 Trading Opportunity in this Stock

Comments

Post a Comment

Popular posts from this blog

How to Confirm a Trend Change. Method to identify momentum change

Image
Condition 1 From down trend to Uptrend, At least one higher Low is essential for trend change. And followed by Higher High will confirm the trend change Condition 2 From down trend to Uptrend, Last Lower high in downtrend should break to confirm the trend change.(In the above picture, LH  Just before the Last LL ) Condition 3 1 2 3 PATTERN OR SWING LOW PATTERN CAN BE USED TO IDENTIFY MOMENTUM CHANGE Condition 4 Use trendline Break with above rule together for true result By checking and ensuring the above condition whether the conditions are met or not met will help you to identify the trend change. we ca not get to the conclusion with only one condition above. for example, we can not say that trend has changed if the trendline is breaked
Read more

Trading Journal on 12 June 2017. BPCL, Coal India

Image
BPCL In the above chart BPCL was in downtrend for the past 2 to 3 days. But the stock is in sideways in last 2 days. Here 710 act as Resistance and 696 Act as Support. The stock is trading between it's resistance and support area after a down move. It may be just a consolidation. If the Stock Break the Resistance (710) and stay above it, The trend be considered and changed from down to up. (Buy can be initiated). If it break resistance, 723 area is next resistance level. If it break the Support, the stock will continue it's downtrend. (Sell can be initiated) Coal India Coal India was in clear down move in first 2 days. After that, The stock was in consolidation downtrend. Stock still going to down move after breaking the first trendline but The slope of the trendline is lowering. Both trendline is in downsilde but 2nd trendline slope is lower than first. Which means the stock down move is weakening and downtrend is coming to end. Stock downtrend is weake...
Read more

Distinguish Retracement and Doubletop. trend or momentum is changing or not

Image
In an Uptrend (or Downtrend), retracement will be happened. But At    a point there may be double top indicating the trend change.here are some feature of both to identify the pull back which is a retracement or it is for trend change(Doubletop) Double top only happened on the top of a move. Ie. it happened only after a clear move to up or down. And the point of doubletop will be long in distance for a sideways move or volatility. While the retracement happened in every up move that may happened just above(below) the sideways channel In double top, last resistance will not be broken in up move In retracement, every resistance will be broken in up move In double top, last support may be broken in pull back just for a while indicating trend change In retracement, last support will not be broken indicating healthy trend Double To Usually leads to trend Reversal or Change in Momentum while retracement may not lead to trend reversal In Retracement, Price m...
Read more