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 EOD data.
Please find below the Charts & Levels for the SENSEX, M&MFIN & TECHM [All Spot Levels] for 10th August 2020:
Date | 10-Aug-20 |
Z | 37697.7 |
Low | 37787.38 |
37979.2 | |
SENSEX | 38040.57 |
High | 38109.68 |
38157 |
Date | 10-Aug-20 |
Z | 129.3 |
Low | 134.35 |
135.3 | |
NSE:M&MFIN | 135.35 |
135.9 | |
High | 138.1 |
Date | 10-Aug-20 |
Z | 648.7 |
Low | 654.4 |
661.6 | |
NSE:TECHM | 662.45 |
665.5 | |
High | 668 |
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