StageInvesting +Elliot Waves

Granules

Let’s learn Stage Investing as we go along.

Weekly Chart :

(a small change here – used 40 wma in place of 30 wma , to be more sure about the stage)
Have a close look at the chart – it went above 40 WMA and then got stuck in a trading range (1st brown line) from 15th August to 25th September.

After that it broke the 1st trading range and closed above that ( last week ) . Also 10 WMA had moved above 40WMA .This means that stock has shown intial signs of entering in Stage 2.
WE TOOK OUR INITIAL POSITION IN THIS STOCK.
(Did not take full position because (a) we were expecting a retest (b) there’re lot of left hand side resistances as shown by brown lines )

Expected small pullback (retesting the upper level of 1st trading range) did not happen and it went up – this is a sign of strength).

This week on Monday, it opened and closed above the falling trend line (red line) ,this is called trendline breakout . We added some more stocks.

Now it is trading above 2nd trading range, we would wait for it to close above the 2nd trading range on weekend as it is weekly chart ( Friday ,3 pm we would take a call) . If it is clearly closing above 2nd trading range , we would add more.

Then we would wait for this to cross the major hurdle. If it crosses, we would keep riding over it by using trailing methods.

If it fails there and start moving down sharply , we would start exiting in phased manner and would book profits.

Volumes Check
Every trading range breakout should have good volumes otherwise it can be a fake break-out. Have a look at blue bars of the volume at the bottom. These show more than average weekly volumes.

MACD Check
Checked daily, weekly, monthy MACD indicators ( given on the top ), all are in buy mode .Grren line crossing above the red line.
RSI Check
Daily, weekly ,monthly RSI above 60 level (given below). Not a must but it is a good confirmation of momentum.

Sector Check
Pharma is showing resilience and good movement is happening in many pharma stocks.
Sector check is very important. Mostly stocks move in a herd ie generally same sector stocks move in one direction.So if the sector is showing stregnth, the stock has higher chances of having a successful S2 journey.

Let’s keep tracking this. It would help everyone to understand the Stage Analysis.

Hope this is helpful.

Disclaimer :This is just a post for learning a method. No buy/sell recommendations. These are probability study methods and chances of success depend upon various factors.