Trade Journal - Sunpharma Case [30 - 04 - 2021]

Here are my mid-day thoughts of the trade I entered today in Sun Pharma stock.

Opening 5-minute candle was strong Bullish candle that led the price to Previous Day High. But near Previous Day High, price was resisted and the price corrected 0.764 of the morning move. Please see the 5-minute chart of SunPharma scrip below.

I wanted to enter a long trade at the Hammer candle. But I needed little more evidence. So, I waited patiently. Again, the price tested 0.764 Fibonacci level. At this point there is Dragon Fly Doji.

Once the price put up a strong Bullish candle I decided to go long. This time there was favorable RR ratio @ 1:3.25.

Details of trade are as follows. Entry @ 645.15, Stop Loss @ 642.9, and Target @ 650.8

As the price moved up I moved up Stop Loss to Higher to 643.4. But I got impatient as price neared 650 and closed the trade at 649.75 prematurely.

But as we can see from chart the price later completed the target and even exceeded well above Previous Day High.

What about Nifty 50?

Yesterday Nifty 50 made a high of 15045. Today Nifty opened Gap down with a green candle. But Nifty couldn’t break Previous Day Low to go higher. After finding support near 14765 levels some time, the broader index slid down. The index even pierced the earlier support zone 14690. Nifty is down by 1.77% for the day. Please refer the 15-minute chart of Nifty 50 index below.

Lessons:

Hold on to winning trades. Trailing the Stop Loss level is a best strategy. To decide on this issue you may revisit the chart at multiple time frames and find if any strong evidence that suggests further push in the price in your direction.

An important aspect to note for this day is that SunPharma stock soared higher while Nifty 50 was not even having any rally of that sort. Not all days there is a need for the broader index to be on your side. That said few days you need the support from the broader index as well. This is an important lesson.

Trade Journal - Sunpharma Case [29 - 04 - 2021]

Here are my thoughts about my trade today. First of all, I am amazed looking at the chart of SunPharma stock to find price validating pivot points R2 and P though out the day. There is lot of randomness present in the price for today. Please refer the 4-minute chart of SunPharma stock below.

Today I went short in this scrip. The primary reason for the short entry was that price met with Resistance zone near 649.5 levels. I expected one more down move to manifest.

Incidentally, after my entry I found the Risk-Rewards ratio in this trade unfavorable. It was just 1:1.45. This was a mistake on my part. Now, I wanted to cut the trade and look for another opportunity.

In hindsight it was a good decision. In fact, I took some time to cut the trade in green at least to pay for brokerage. There was every chance for my Stop to have been taken off by market. Luckily I found a point of exit little into the trade on the green side.

After manually closing the trade, I was relieved looking at the randomness of the price. However, I also found that the trade had less support from multitude technical confirmations. Looks like I entered a dumb trade.

What about Nifty?

Nifty 50 Opened Gap Up near a Resistance zone. The zone is marked by the rectangular zone near R2. It's amazing to see how the broader index hit the pivot levels so accurately. The Gap was filled today itself. Today's top is near 15043. Please refer the  15-minute chart of Nifty 50 index below.

Lessons:

Never enter a trade that has an unfavorable Risk-Rewards ratio against you. First check if RR ratio is favorable. [I only fear I am learning the hard way.]

A full list of technical confirmations is the need of the hour for me.

Trade Journal - Axis Bank Case [28 - 04 - 2021]

I present my mid-day thoughts on today's trade. Though Axis Bank scrip opened Gap up beyond the previous day high, there was heavy selling in the beginning of the day. Here is a 2-minute chart of Axis Bank.

I drew two trend lines and prematurely assumed that it was a Diagonal pattern. I expected a rise to 700 levels. Hammer shown by the arrow mark was the cue to me. I reasoned out: "Buyers are coming." RSI too was looking bullish.

'Place the stop below the low of Hammer and go long' was my primary thought. But, I completely ignored the Bearish candle next to Hammer. We can see small green candles which indicate buyers were weak. Somehow, I didn't notice this.

My Long entry trade details are as follows. Entry Price @ 694.8, Target @ 700.8, and SL @ 692.8. My stop got erased as the price started moving down. Professionals caught the novices nicely here.

At 11:15, there was another opportunity to go long in Axis scrip. Having suffered first loss for the day I couldn’t muster much courage to go long. We can see in the hindsight that the second opportunity was a good one.

What about Nifty 50?

The broader index continuing its ascent reached 14850 levels by 1:00 p.m. Nifty opened Gap up with a strong Bullish Candle for the day taking off 14695 Resistance zone. All through the day Nifty kept inching higher and higher. Please refer the 15-minute chart of Nifty 50 index below.

Lessons:

I must put in place list confirmations that need to be satisfied before a trade is taken up.

More active focus is must to see if the presumption of the trade is being challenged in the real market environment. If yes, make zero hesitation to take action.