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Support and resistance

Discussion in 'Chit Chat' started by verenmitter2001, Feb 18, 2013.

  1. verenmitter2001

    verenmitter2001 Member

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    IT, Education & Ex-Army officer
    Hi shabbir
    We have been following the technique of buying stock above resistance and make some profit which works in many cases.
    I have experienced that most of theses stock are in there 52 week high level and over bought.
    The movement they cross the 52 week mark and 2-5 trading sesion huge coreection come into play/
    For Example Maruti was in breakput above 1600 and now trading far below. Kotak bank was in 680 breakout above it now trading at 660
    Ing vyasa had the same story.
    I wanted ask does this technique make us invested in stock for longer period ( as most of them are negative now) or this is happening as an exception.
    Now if we contradict this RELIANCE capital has bounced back from its support today but i am not able to decide which technique to follow....

    regards
    veren
     
    verenmitter2001, Feb 18, 2013
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  2. shabbir

    shabbir Administrator Staff Member

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    Yes such false breakouts happen and we call them as fakey and this is where stop losses saves you.

    We have to follow one process and then expect stop losses to come into our help for things where we happen to be wrong.
     
    shabbir, Feb 18, 2013
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