I am delighted to be logging an interesting case study. The 5-minute stock chart that you see below is that of Bharat Forge Ltd. Company. As soon as the market opened I was scanning my watch list of stocks. Those of us who use Zerodha will know that in case an event is approaching for particular scrip, the same will be marked by a subscript 'Event'. That was the case for Bharat Forge this morning.
I curiously opened the chart started looking for trading opportunities though I wasn't prepared to take up trade in this new scrip. I marked a Trend Line, a Supply zone. I frequently checked the chart throughout morning.
Interestingly, the stock was finding stiff resistance near 685 zones. I marked downward facing red arrow marks for reference. At 9:45 a selling opportunity emerged with favorable Risk-Rewards ratio. Additionally, Double Top was in place, price-RSI divergence developed. The stock tanked 20+ points for the rest of the day before closing near 668.
Non-aggressive traders were also given an opportunity to enter short a little later when price was below 200-MA and was resisted by the Trend Line seen in the chart. Keeping the stops above 200-MA one had another opportunity to go short.
What about Nifty 50?
Nifty 50 opened higher and made new high at 15660. This is also all time high. For the past few sessions, Nifty 50 has been making new highs. Please see the chart below.
Today, once it reached 15660 Nifty kept falling till mid-day. For the rest of the day, nifty stayed sideways closing -0.15% lower for the day.