How To Make Excellent Profits With Supports & Resistance # 1

How To Make Excellent Profits With Supports & Resistance

‘Today’s Case Study Muthoot Finance Gave profit of Rs. 52,500/- in just 4 days on margin of Rs. 1,00,000.’

Excellent Profits With Supports & Resistance

SUPPORTS & RESISTANCE RE-introduced

15 YEARS Ago When I started my career in Share Market, I heard lot many people using these terms support & resistance quite often but unable to make best use of it and make money. So my today’s post will help you understand how helpful it can be to you.

Terminology :

  1. Earlier Support supports and the Earlier Resistance resists
  2. Fall below support level pushes the stock price lower
  3. Rise above the Resistance pushes the stock price higher
  4. If stock price falls & sustains below Support level then this level becomes resistance
  5. If stock price rises & sustains above resistance level then this level becomes support

Alternatively,

  1. Bull Trap : If stock prices go up above Resistance level and quickly falls below resistance level, this is Bull Trap. Which means Bulls (long traders) are getting trapped and stock price will fall sharply?
  2. Bear Trap: If stock price goes below a support level and without sustaining below this level makes a strong come back above support level, this is Bear Trap. Which indicates Bears (short traders) are getting trapped and stock price will rise fast?

Our Recommendation successfully gave 52.5% returns on Amount of margin (1 futures contract) in just 4 trading Sessions.

Case Study :

Stock : Muthoot finance Reco. Rate: 439 SL 415 TGT 475

Now just look the chart and understand how this study & stock helped our traders make awesome profit of Rs. 52,000/-

  1. Stock made a low of 430 on 15th (point 1) & retested same level on 6th Dec (point 2). This  is Support Line 1.
  2. Level of 447 on 22nd November  (LINE 2) played a resistance on 8th December
  3. Stock price falls below 430 on 13th & quickly bounced back above 430 on 18th Dec. (pink marked circle) Here BEARs (short traders) were trapped.
  4. We waited for stock to come out of consolidation zone (see box)
  5. Our Buy Recommedation on 18th of December @ 439 with stop loss of 415 & Target of 474

Muthoot Finance went up to kiss 477 level on 4th day, (See Target area) & made our traders wealthier by another Rs. 52,500.

3 Questions to ask ourself

  • Does it happen to me, when I buy stock goes down & when I sell stock goes up ?
  • Whether I struggle finding opportunity or patiently holding on to it?
  • Do I need to win with markets or make profits for myself ?

Trading Mantra

 “Excellent Profits in trading is not a myth but a reward for pointing out right opportunity, grabbing it, holding it patiently and finally exiting successfully”

2018-04-03T07:26:00+00:00