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, DRREDDY,BERGEPAINT,INFY & LT for 8th June 2020:
| Date | 08-Jun-20 |
| Z | 33898.9 |
| Low | 33958.02 |
| X | 34216.9 |
| SENSEX | 34287.24 |
| Y | 34401.4 |
| High | 34405.43 |
| Date | 08-Jun-20 |
| Z | 3953.4 |
| Low | 3992.3 |
| X | 4022.4 |
| NSE:DRREDDY | 4024.9 |
| Y | 4032.3 |
| High | 4050 |
| Date | 08-Jun-20 |
| Z | 501.6 |
| Low | 502.9 |
| X | 508.8 |
| NSE:BERGEPAINT | 510.85 |
| High | 512.5 |
| Y | 519.7 |
| Date | 08-Jun-20 |
| Z | 698 |
| Low | 700.6 |
| NSE:INFY | 703.55 |
| X | 705.3 |
| Y | 711 |
| High | 711.7 |
| Date | 08-Jun-20 |
| Low | 936.6 |
| Z | 940.1 |
| X | 950.6 |
| NSE:LT | 955.25 |
| High | 959.9 |
| Y | 966.9 |
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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