Let us look at the logic behind this trades
How ICICI Bank formed bottom around 260 levels in July 2018?
Pay attention to the Price Action more when it is not doing what you thought it should be doing
ICICI Bank became a toxic stock during 1H CY2018 when the whistleblower declared war on Chanda Kocchar and horror stories started coming out. The stock declined to 260. The press started writing all sorts of negative stories against the company
Source: Chartalert.com
What was price doing – The stock declined to 260 – and bounced. Yes bounced from the level it had last bounced…oops somebody was buying. It was a surprise to many. What people ignored back then – the stock refused to go down below 255-260. Then once again under tremendous market pressure, the stock declined to levels near 255-260 in July 2018 and bounced again. This coincided with the ICICI Bank board sending Chanda Kochar on indefinite leave
Peak of crisis time = Opportunity?
The story of ICICI Bank –
June 29: Chanda Kochhar goes on leave
July 16: The stock retests the Lows of 260
Now 3 months+ later – The stock is up 26%— Deepak Singh (@smarket) October 22, 2018
ICICI Bank stock never looked back since then and today 16 months later, the stock is up 87% .
Source: Chartalert.com
This is a great case study on how one should read the collective market wisdom when media is losing mind over some controversy. Price Action was giving a different message back then and as Price Action follower – it’s our duty to look at the evidence objectively without losing mind
Reliance Trading Opportunity
The market correction offers a great opportunity to buy leadership stock on declines
Source: Chartalert.com
It was a no brainer trade back in the last October when Nifty bottomed aorund 10000 levels. One always says one wants to buy good stocks during a decline. This chart is a great example of how this works. I covered the opportunity back in October 2018
Bharti Telecom Investment Opportunity
Even beaten down large caps have a tendency to surprise from time to time. What do you have to lose if you can put a stop loss
Bharti Airtel was completely out of favor stock in 2018 and was trading near 260 in the third week of October 2018
Source: Chartalert.com
As you can see in the chart above – Bharti Airtel stock had rallied in 2017 from the levels of 260 to levels of 500, but then in 2018 – the stock saw vicious correction back to 250-260 levels. It was a tough period. There was tremendous political uncertainty and Bharti was not the stock investors/traders were excited about. But sometimes, it pays to follow the price action
As per Science of Stock Price Action:
When a stock bounces big time from one level, then one can expect a rally from that level if the pullback happens due to market conditions.
Bharti after a steep rally in 2017 was back to the same level: Buying Opportunity? Just see how it worked out
Source: Chartalert.com
Nobody was looking and Bharti Airtel stock slowly and steadily climbed and now twelve months later – Bharti Airtel stock is up 64%. Honestly, I would never have recommended Bharti to anyone but this trade inspired me to take DLF trade .
https://www.smarketpremium.com/2019/10/15/can-this-stock-perform-like-bharti/
One of the most important learning in the market is to be an avid observer and see what’s working Eicher Motors delivered outstanding return because of the same
Naukri Investment Opportunity
Breakout stocks are buys on pullback
I have been covering Naukri since its breakout days back in 2017. It offered another opportunity in Sep this year when the stock was at 200 dma
https://www.smarketpremium.com/2019/09/15/opportunity-newsletter-sep-15-2019/
Source: Chartalert.com
I hope this helps you understand how trades develop. Big Investment Opportunities don’t come every day but one should keep watching markets on a regular basis, keep learning so that when the next opportunity comes you are ready to take advantage of it. Always remember no matter how hard you try, nothing works all the time. Hence one should always have a stop loss.