Turnarounds are the most difficult patterns to discover, trade and manage.
Let me share a fascinating case study I discussed on April 27 titled: How should one read 12% upmove in Aban?
Science of Stock Price Action: Turnaround Breakout
The Rationale: Aban was struggling below 100 day moving average for long long time
Aban Offshore as you can see in the chart above developed a well defined resistance at 100 dma. So, All that was required - wait for a turnaround i.e. wait for move above 100 dma. Aban did that with intensity on April 27 2016
What happened Next?
Turnarounds confirm itself by retesting the previous resistance as support. That's precisely what Aban did...though it took long time and that's ok.
Technically, some turnarounds move with sharp intensity. Will Aban do the same? We will wait and see. The objective of the post was to describe a turnaround process.
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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