The Lesson is Have Patience when a stock is doing all the right thing because
Aban Case Study
Aban Stock was an underperforming stock for a long period of time, as it traded below 100 DMA. The chart below states the obvious: Aban stock had a well-defined resistance at 100 dma
Aban stock then turned around on April 27th when it rallied past 100 dma with huge candle.
I covered the stock on April 27 in a Member's only post as a Live Case Study titled: How should one read 12% upmove in Aban?. In the post, I explained that a Turnaround has happened and stock from Sell on rally has become Buy on dips as long as it holds 100 dma as support.
Now it has been seen that when stocks turnaround with a large candle, people follow it for few days and then forget about it. People who pounce on that opportunity immediately get frustrated and exit because of unreasonable expectations. It is the lack of patience that defines the management of trading position. What one requires - patience and waiting game.
Patience before Buying
Just see what Aban stock did...it pulled back to test 100 dma as support, and not once but twice. It was an open invitation when the stock did that.
Now just observe what stock has done after it retested the support - A good bullish move. Remember, the focus has to be on: Is the stock doing the right thing and if the answer is YES, then all one requires patience.
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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