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, BANKNIFTY, TCS & AXISBANK [All Spot Levels] for 27th July 2020.
Date | 27-Jul-20 |
Z | 37696.2 |
Low | 37748.41 |
38037.7 | |
SENSEX | 38128.9 |
38220 | |
High | 38235.73 |
Date | 27-Jul-20 |
Low | 22417.2 |
Z | 22603.4 |
22644.4 | |
BANKNIFTY | 22662.05 |
High | 22854.05 |
23062.6 |
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