The frustration of having missed a beautiful trade has costs. Today I missed a great opportunity in SunPharma stock. The price soared higher and higher while I looked on and on. The stock opened near a strong Support zone of 643. At 9:25 an opportunity emerged. I was really hesitant to enter the trade that early. I waited further. Please look at the 5-minute chart of SunPharma below.
Price broke above the Tr. Line and exactly near the center pivot point ‘P’ there was an opportunity. I had apprehensions about the success of this opportunity as well.
I also missed the next opportunity near 665 as well. But, I drew two small converging Lines during later part of the day and assumed it to be an Ending Diagonal. That was the mistake.
“After having gone this far the price is sure to fall.” – This was my reasoning. The short position is marked in the chart. Needless to say my stop was taken off.
What about Nifty 50?
Nifty opened at 14604 and closed at 14635. Day's range was just 30 points. For most part of the day, the broader index stayed sideways. Of all the sectors, Nifty Pharma was up by 4% though Nifty 50 stayed range bound. At the end of the day, Nifty moved above the Tr. Line drawn in the chart. Below is the 5-minute chart of Nifty 50 index.
Lessons:
When in abnormal mental condition like frustration or apprehension, a trader makes a dumb trade. This is the big lesson for the day.
What if the stock has risen too far? It can always go further higher the same day.
While the broader index stayed range bound for the day, Pharma sector zoomed higher by 4%. It’s all about the strength of technical confirmations that matter in a trade.