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Monday, 28 January 2013

Todays Trades 28 Jan 2013

1 winning and 1 losing trade


Dear Readers

Today I did two trades as posted in the morning. A long in Maruti and Tata Motors. One exited in loss and the other in good profit. Read below.

I also provide a trade which I avoided today which otherwise would have been in loss.

1. Maruti Long - Loss


Maruti was a buy for me in the Swing trade and I thought of doing a day trade in the same scrip as UBS upgrade also came in. I thought that this will prevent the stock from falling. However after my entry the stock consolidated and fell down.

Lesson learned. Never buy a stock when it is up on a news. Big players tend to offload stocks on news and small players like us get trapped. This is what happened exactly today. However because of chart signals, I could exit on time.

5 min chart.


1. Maruti opened gap up and at 9:15 the upgrade news came. The stock was not moving up or down, but consolidation. I thought after consolidation the stock will move up and hence bought.
2. SSTO was in buy mode. Rest of the indicators were not strong.

2 min chart

1. Stock started rising after consolidation.
2. No breakout above the days high was observed.
3. 2 out of 3 indicators were supporting.

30 min chart

1. Indicators were positive.
2. I tend to ignore a small doji in 30 min chart which was probably signal of end of upmove.

Why did I book loss and exit Maruti

1. Maruti started consolidating after buy. 
2. While consolidating, indicators in 5 min chart were giving negative signals.
3. Breakout in the same direction and candles went below the EMA line. 
4. Hence the buy position was squared off with a loss. 
5. After that the stock fell continuously and there was no one to buy to bring the price up. 

This is a similar pattern which keeps occuring in Indian markets especially when stocks move up due to a news. Please another trade of mine few days back here.


2. Tata Motors Long - Success

Today Auto Stocks were in favor in the morning. So I looked at Tata Motors. Ever since the gap down on 24th Jan, Tata Motors was steadily rising. Please see the 30 min chart here. 

30 Min Chart.

1. MACD was positive
2. Stock price continuously rising.
3. Candles above EMA
4. RSI rising. 

5 min chart

1. 20 EMA above 50 and 200., EMAs rising and candles above EMA
2. Rising MACD and bullish crossovers
3. Rising RSI
4. SSTO was giving a negative and then tending to cross over positive. 

Tata Motors - Exit with Profit

The stock was steadily trending upwards. In the case of such moves, without much fluctuations around EMA, it is better to maximise profits by riding along the trend. 

A Trade Avoided Today

Many times you make money by not trading. Today Auto stocks were in demand and there were several buy calls for Bajaj Auto. However the days high was never crossed and Bajaj Auto did not give money to anyone. It is always important to understand the chart patterns during the day to decide whether to enter a trade or not. See the chart example of today's Bajaj Auto

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