RBL BANK (The Next Big Thing)
Prosenjit Ghosh
SEBI Registered Research Analyst | Price Action Trader | Mentor | Trainer | Algorithmic Trader | Quant | Winner of Zerodha 60 days & Fyers 30 days Challenges.
Dear Traders and Investors,
For the last 100 years, all the great price action traders have always said that the best signal for long-term trade is the first signal after a big downtrend.
When we dive into the Candlestick Chart of #RBLBANK, we observe a big downtrend and the price was making Lower Lows and Lower Highs. This downtrend took the price of RBL Bank from 716.40/- to 74.15/-.
Yeah, it is a scary kind of a drop. There must be some kind of bad news and one shouldn't Buy this stock. That will be a Novice way of thinking.
The price of a Stock goes both up and down depending upon the imbalances between its Demand and Supply. When Demand is higher the price goes up and when Supply is higher the price goes down. It is just simple Economics.
But when the price wants to go up and there are higher demands that phenomenon creates many patterns on the candlestick chart. For the last 100 years, Price Action Traders have identified these patterns and predicted great market moves.
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So, in #RBLBANK price has recently broken a Lower High, which is a Bullish Signal after a big drawdown and also standing at a Trap Zone. These kinds of patterns on a monthly time frame do take the price to an all-time high. Hence the expectation is it will move up for the Long Term.
Entry: CMP: 266.55 | SL: 197.70 | 1st Target: 438.65 | 2nd Target: 716.40
In this kind of scenario, where price changes its trend, the institutions often try to scare out the retail trades hence they go for stoploss hunting. This is the game of price which they play just to get fill for their big orders. Hence, in this kind of scenario Buying on Dip would be a better strategy than keeping a tight stop-loss and getting stopped out in a good investment trade.
For Swing and Intraday keeping a stop loss is a big necessity as in these kinds of trading Time is our Enemy. Whereas, in Long Term trading Time is our Friend and that gives us the advantage to hold the stock till it becomes profitable. But for the Long-Term trading, we need to catch up with fundamentally good stocks.
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Disclaimer: Stock trading is inherently risky and you agree to assume full responsibility for the outcomes of all trading decisions that you make, including but not limited to loss of capital. None of the stock trading calls made by Prosenjit should be construed as an offer to buy or sell securities, nor advice to do so. All comments and posts made by Prosenjit are for information purposes only and under no circumstances should be used for actual trading. I confirm that I have not received any remuneration or commission from any institution or company discussed in this article.