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, BHARTIARTL & AXISBANK [All Spot Levels] for 03rd August 2020:
Date | 3-Aug-20 |
Low | 37431.7 |
SENSEX | 37606.9 |
37645.5 | |
Z | 37664.8 |
High | 37897.8 |
38309.5 |
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