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LEARNING POST:
Normally I see many traders getting confused in deciding if its DISTRIBUTION/RE-ACCUMULATION. So let me make an attempt to explain how I panned myself in understanding the process of DISTRIBUTION.
Firstly its more important to know that every stock has FOUR PHASES
Normally I see many traders getting confused in deciding if its DISTRIBUTION/RE-ACCUMULATION. So let me make an attempt to explain how I panned myself in understanding the process of DISTRIBUTION.
Firstly its more important to know that every stock has FOUR PHASES
ACCUMULATION - MARKUP - DISTRIBUTION - MARK DOWN
(Refer the image for better understanding)
After the stock has gone passed through the phase of MARKUP it will set a PEAK (POINT-A) then the stock will move down and set a TROUGH(POINT-B).
Cont..
(Refer the image for better understanding)
After the stock has gone passed through the phase of MARKUP it will set a PEAK (POINT-A) then the stock will move down and set a TROUGH(POINT-B).
Cont..
Up to POINT-B everything is going as usual and every body is thinking that the stock has retraced little bit and there is profit booking. But the actual part of analysis begins at POINT-C wherein you are able to see that the stock is not able to sustain above PEAK (POINT-A)
Cont.
Cont.
This type of action is considered as an UNHEALTHY SIGN and then the stock rolls down and crack below TROUGH (POINT-B) and this is perfect SIGN OF WEAKNESS and to confirm if the stock has become weak or not just check the post PRICE ACTION
Cont.
Cont.
In the post PRICE ACTION after POINT-D we are clearly able to see that stock is struggling to go up this is perfect example of EFFORT VS RESULT wherein EFFORTS are made to push the stock higher but NO RESULTS just visualize the band of HIGHS at POINT-E (LOWER HIGH than POINT-A&C)
Then see the stock crack down and move even lower (POINT-F). Those who are SAFE PLAYERS and want to take a SHORT can take on break of POINT-D and those who have patience can wait for RE-TEST (ROLE REVERSAL) of TROUGH formed at POINT-B and then take SHORT
Those who are keen to know which stock is this.
Check the link attached below
https://www.tradingview.com/x/ZL6z4w0b/
Those who are little bit confused I would suggest make use of 30 WEEKLY EMA and when you see that after good run up 30W EMA is flattening out that's the main clue to be cautious
Check the link attached below
https://www.tradingview.com/x/ZL6z4w0b/
Those who are little bit confused I would suggest make use of 30 WEEKLY EMA and when you see that after good run up 30W EMA is flattening out that's the main clue to be cautious
One simple note to improve your edge towards any system. "If you are struggling a lot in finding good opportunities always try on HIGHER TIME FRAME you will improve your edge"
See in the above mentioned chart its a WEEKLY CHART
See in the above mentioned chart its a WEEKLY CHART
