Higher High & Higher Low in any stock or Index shows uptrend on the other hand Lower Low & Lower high shows Downtrend when stock close above the previous closing place on a continous basis we call it Stock/Index is making higher high or stocks stop makining fresh low on a closing basis we call stock is making higher Low , its a clear sign of strength (or Uptrend), on the other hand when stock start giving closing below the previous closing price we call stock is making lower low or if stock stops making fresh high on a closing basis we call stock is making lower high, Its a clear sign of weakness (or Downtrnd)
Volume and Candlestick (or chart pattern), Trendline also plays very important role in confirming strength of Uptrend & Downtrend
Lets take a Realtime example where I am expecting some real fireworks in the coming week(8 July onwards)….
L-1 # As per Daily chart ITC shown Frirst strength on March 20 when It respectected Previous Low or Base
H-1 # Second sign of strength shown on April-10 when stock made fresh high of 437
L-2 # Third sign of strength shown on April-18 when stock made a low of 418 but its higher then Previous Low
H-2 # Fourth sign of strength when stock made a high of 440 on 7 May
L-3 # Fifth sign of strength shown on May-09 when stock made a Low of 425 but it respected previous low
But the real problem starts from May-23 when stock failed to make fresh high and closed at 441 amd also made a Dozi candle ( for candlestick & pattern check the link ) which was almost equal to previous fresh high (440) and stock seen a heavy correction in coming days.
June-04 (Post election results) onwards stock tried to give strength but failed to make fresh high and closed around 439 on June -07 this again resulted into correction despite the fact market was market was making fresh high on a regular basis
Sign of relief for this stock is in the month of June stock is making Higher Low June-04 closing was around 415 and June closing is around 420 ( For Fibonnaci retrecement refer chart) which also showing positive sign, if stock starts trading above 440 and give a closing of and above 440, we can see the level of 475 in the coming days
We discussed ITC Last week and expected possible outperformance this week its closed around 460, for ITC High,Low & Closing details check NSE site
Today is 19 July, Booked Profit in my Position this stock has given almost 10% run in last 2 week, Refer Chart & Below Given Table for Option Spread Details :-
Debit Spread Performance ( on 5 % move) :-
Credit Spread Performance ( on 5 % move) :-
