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HCL is on a ride

Discussion in 'Technical Analysis' started by monilhathi, Jul 26, 2012.

  1. monilhathi

    monilhathi New Member

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    HCL Tech has opened higher today @515 and although it is nearly at a 52 wk high the chart trend shows a huge upside. The 6 month RSI @ 62 also has much steam left. I will wait for another day and may go long on this one.
     

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    monilhathi, Jul 26, 2012
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  2. shabbir

    shabbir Administrator Staff Member

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    Yes you should wait for a day because there is a gap up opening which should sustain.
     
    shabbir, Jul 26, 2012
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  3. pravin_g

    pravin_g New Member

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    Where should be the stop loss in this case? 505 the earlier resistance and the start of the gap opening or some where between middle of the gap

    Thanks
    Pravin
     
    pravin_g, Jul 26, 2012
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  4. shabbir

    shabbir Administrator Staff Member

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    The resistance when taken out should become support and that should be your stop loss.
     
    shabbir, Jul 26, 2012
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  5. monilhathi

    monilhathi New Member

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    Agree. It would be around 505. But more than that it is the risk:reward ratio which you are taking. So if you want to stop your losses at around 8% of CMP then you should at least look for 16% profit margin. I usually try and have my SL around 8-10% max irrespective of the price. Its an opportunity cost with respect to the money if invested in other instruments like bank FDs etc. I would welcome any thoughts from Shabbir on this approach
     
    monilhathi, Jul 27, 2012
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  6. shabbir

    shabbir Administrator Staff Member

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    Stop loss should be the support i.e. resistance which it took out and so should not be a big risky trade.

    I try to keep my stop loss to under 5%
     
    shabbir, Jul 27, 2012
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