Most of the time, a stock or an Index trades between and around x,y & z
Whenever the price crosses above all 3, a correction sets in sooner than later and vice versa when the prices go 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 price levels.
When the stock or index 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 price is below all 3, the variable immediately above 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.Please find below the Charts & Levels for the SENSEX, NIFTY, BHARTIARTL & TITAN for 26th May 2020.
Date | 26-May-20 |
Z | 30466 |
Low | 30474.88 |
SENSEX | 30672.59 |
X | 30751.8 |
Y | 31058.3 |
High | 31107.91 |
Date | 26-May-20 |
Z | 8966.7 |
Low | 8968.55 |
NIFTY | 9039.25 |
X | 9052.5 |
Y | 9140.7 |
High | 9149.6 |
Date | 26-May-20 |
Low | 587 |
Z | 587 |
X | 592.5 |
NSE: BHARTIARTL | 593.2 |
High | 597.4 |
Y | 604.6 |
Date | 26-May-20 |
Z | 833.5 |
Low | 837.9 |
X | 847.8 |
NSE: TITAN | 849.65 |
High | 855.95 |
Y | 856.7 |
If you would like to use the Trading Range Indicator for a Stock of your choice, please reply to this email.
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