Wednesday, July 5, 2017

15 important rules based on stock market observations

15 Rules of investment and short term trading


*Rule 1*
If the high price of the entire week is achieved on Friday, expect higher prices next week.
 *Rule 2*
If the low price of the entire week is achieved on Friday, expect much lower price next week.
*Rule 3*
In a highly uptrending market weekly low’s is achieved on Tuesday
 *Rule 4*
If market is in strong down trend (if main trend is down), the weekly highs are generally achieved on Wednesday.
 *Rule 5*
When the price crosses the high of the last four weeks, it’s an advance indication of more higher prices.
 *Rule 6*
When the price breached the low of the last four weeks, it’s an advance indication of more lower prices.
 *Rule 7*
In an up trending market if the prices breaks the 30 DMA & remain below it at last for 2 consecutive days, it tells us of a much more great correction (vice-versa).
 *Rule 8*
If the market rises for 5 consecutive days, there is a high probability that correction will be last for 3 days. (Ratio is 5:3).
 *Rule 9*
When the price starts rising from a particular level, Rs.100 or 100% rise whichever is earlier becomes a strong resistance.
*Rule 10*
When price crosses the high of the last 3 days it tells us about much more higher prices on the 4th day.  (Traders can buy it on the 4th day and place a SL order Rs. 3 below the last 3 days high) (vice-versa).
*Rule 11*
If subsequent correction is greater than the previous correction both in terms of price & time magnitude, this is an advance indication that trend is changing.
*Rule 12*
50% of the last highest selling Price is the strong support area. Any stock which is trading below this 50% level is not the useful for investment.
*Rule 13*
If a price is rising for 9 consecutive day’s at a stretch, then there is highly probability for a correction for 5 consecutive days. (Ratio is 9:5)
*Rule 14*
Don’t ignore a double bottom & triple bottom signal on a monthly chart, after a minimum gap of 6 months. ( advance indication for mid term investment)
*Rule 15*
Don’t ignore a double top & triple top signal on a monthly chart, after a minimum gap of 6 months.  (Not the right place for investment / entry, price may fall).
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