Most of the time, the Sensex trades between and around x,y & z
Whenever the Sensex crosses above all 3, a correction sets in sooner than later and vice versa when the Sensex goes below all 3.
This technique has been back-tested for the last 7000+ trading days [since January 1991] with consistent accuracy.
During periods of sustained rallies and extended corrections - the 3 variables - x,y&z stood as signposts for probable Sensex levels.
When the Sensex manages to hold itself above all 3, keep the trailing stop loss at the highest of the 3 variables - x,y & z.
Similarly, when the Sensex is below all 3, the variable immediately above the Sensex acts as a Resistance for the index.
This technique is slightly finer than BollingerBands and can be calculated on the EOD data using a simple spreadsheet.
It can be used on any liquid stock, index or future with at least 21 days of EODdata.
The following are the charts & levels for INDUSINDBK, BANDHANBNK, CESC:
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