Monday, May 16, 2016

How to select stocks for Intraday trading using Elliott wave, Momentum, Fibonacci levels?

Below are the few key pointers I personally followed during the ET Now stock trading game that helped me to win by substantial margin.

Understanding trend using Elliott wave, Neo wave, Time cycles: First and most important thing is to analyze the direction of Nifty and the broader market along with maturity of ongoing trend. To do this I used Elliott wave, Neo wave and other advanced technical analysis concepts for confirmation and maturity of the trend.

Avoid looking at overbought or oversold readings: Next step involved looking at the outperforming stocks. Intraday trade is all about capturing momentum rather than reversal. It is better to avoid looking at overbought zone on RSI as a strong trending stock will result into over bought values. Also avoid capturing reversals so a stock which is already near new monthly or yearly lows should be preferred for shorting and stocks that have managed to outperform the broader markets over the period form a strong positive bar.

Channeling technique: This is one of the most important methods that I use to determine the resistance and support areas. If prices are lying near the upper end of the channel it is better to avoid going long irrespective of the momentum whereas if there is a big momentum bar formation from the channel support with a clear higher highs and higher lows and the risk reward is favorable then the stock can be shortlisted

Fibonacci projections: To apply this it is important to understand basics of Elliott wave so that the projections are done from the wave perspective. This helps in deriving the target levels.

Now look at the example of one of the trades done on 10th May 2016

Manapurram daily chart:
Manapurram, Elliott wave, Stocks, Trading Strategy

Chart courtesy:

Now the above chart is of Manappuram Finance one of the stocks on which Long positions were taken on 10th of May based on the techniques mentioned above.

The stock was up by 20% after three days i.e. on 13th May. We have exited based on the target levels but the point is to simply highlight the potential of the strategy. Also it doesn’t matter whether the movement happened on back of news or results because this stock was already in strong upside momentum even before the news break out.

Training on Trading strategy for Intraday / Positional trades using Momentum, Neo wave, Time cycles on 23rd and 24th July 2016. Learn the in depth strategy followed during the show on ET NOW. Enroll Now and avail early bird offer. Limited seats! Contact US here or write to us at or on +91 22 28831358 / +91 9920422202

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