Market does not care what you believe or what you like. It has to price a stock based on current circumstances and it will continue to do so without caring about your thought process.
ICICI Bank stock was Avoid for long time between 2010 and 2014 because it traded below a resistance point of 250-260. There was no trending move below the resistance point of 260
STRATEGY: ICICI Bank stock was Avoid
Then - came May 2014 - election time and ICICI Bank broke out above 260 with a very large candle.
STRATEGY: Buy ICICI Bank on Breakout at 270
It was a large candle breakout and in following 8 months - ICICI Bank rallied 45%+. That's a big move for a large cap stock but then all the NPA talk and Nifty downward journey started. ICICI Bank stock succumbed to that talk. As Nifty created a base around 7540 - ICICI Bank created a base around 280-285
STRATEGY: Buy ICICI Bank near base of 280-285 and wait
I did mention then in blog and twitter about ICICI Bank at 285 -
Look at ICICI Bank - right at support levels pic.twitter.com/WldLrA1Z6Y
— Deepak Singh (@smarket) June 8, 2015
Here's how it worked from trading perspective
ICICI Bank now has a solid line of support around 283. Bounces 11% in 2 weeks from 283https://t.co/aedZIw2HI1
— Deepak Singh (@smarket) June 22, 2015
But patience did not deliver gains. Unfortunately - ICICI Bank succumbed to pressure and broke down below 280-285.
The Breakdown once again made the stock - Avoid. The stock sold off from 280 to 180.
Now ICICI Bank stock has lost all its inherent technical strength and is only moving as per Nifty moves.
Now despite being in a strong Bull market for last few years: ICICI Bank has not been a great mover. And keeping a close technical watch could have helped one avoid being trapped in such a stock. It always make sense to keep a close eye on what stock is doing on charts
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Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers